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Use money from envelopes to pay for payroll in QuickBooks Online

Learn how to save money in an envelope to pay for your next payroll.

You can set aside money in an envelope for emergency savings or specific purposes. Envelopes ensure you don't spend money that's already earmarked for essential expenses.

You can create an envelope to save for payroll-specific expenses. Simply move money from your QuickBooks Cash account to an envelope.

If you use QuickBooks Payroll or another service like ADP, you can create an envelope to save money for payroll. This helps ensure your funds aren't used for any other expense.

When you're ready to run payroll, you must transfer the money out of the payroll envelope into the main QuickBooks Cash account or the bank account you use to run payroll. This transfer isn't automatic and is to ensure you have enough funds in the account to cover your payroll.

If QuickBooks Cash isn't the bank account on file to run your payroll, you can change your payroll bank account.

If you sign up for QuickBooks Cash first and then sign up for payroll, there's an additional benefit. Since QuickBooks knows about your connected payroll account, it automatically uses the money in your envelope to fund payroll.

Step 1: Sign up for QuickBooks Payroll

  1. Follow these steps to sign up for payroll.
  2. When QuickBooks asks which account you want to use to fund payroll, select your QuickBooks Cash Account. Then select Accept and submit.


Once you're signed up for payroll, you're ready to go. We'll connect your QuickBooks Cash account behind the scenes.

Step 2: Create an envelope for payroll

  1. Follow the steps to create an envelope for payroll.
  2. When QuickBooks asks what you're saving for, select Employee Payroll.
  3. When you have the envelope, transfer money from your QuickBooks Cash account into the envelope.

Note: You can only have one envelope for payroll.

Step 3: Run payroll

When you run payroll, QuickBooks automatically uses the money in your payroll envelope.

If there's enough money to cover payroll, QuickBooks will keep using the money the next time you run payroll.

If payroll is more than the money in your envelope, QuickBooks takes money from your QuickBooks Cash account.

If you're running low or don't have enough funds in your QuickBooks Cash account, you'll see a message. Make sure you keep money in your QuickBooks Cash account to pay for things like payroll.

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