Use money from envelopes to pay for payroll in QuickBooks Online

If you use a non-QuickBooks payroll provider, you can create an envelope to save money for payroll. This helps ensure your funds aren't used for any other expense. However, you will not be able to take advantage of the QuickBooks Payroll envelope payment functionality.

Instead, you will create and fund your own envelope, and when you're ready to run payroll, you must transfer the money out of the payroll envelope into the main QuickBooks Checking 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.

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 Checking Account. Then select Accept and submit.

Once you're signed up for payroll, you're ready to go. We'll connect your QuickBooks Checking 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 Checking account into the envelope.

Note: You can only have one envelope for payroll.

Step 3: Run payroll

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

Note: You'll see that the last 4 digits of the Funding Account may differ from your QuickBooks Checking account's last 4. This is the Wallet ID for your QuickBooks Checking envelope that you're seeing rather than the account number.

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

If there's not enough money to cover payroll, make sure to transfer funds into the payroll envelope, or update your bank account, before payroll runs.