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Process Late Payroll Or Send Backdated Paychecks In QuickBooks Desktop Payroll

To ensure your employees are paid on time, QuickBooks Desktop Payroll requires paychecks be submitted to Intuit before 5:00 pm PT,  2 banking days prior to the check date. This prevents any late fees or penalties.

Determining whether your payroll is late or not varies depending on whether you use QuickBooks Assisted Payroll (Full-Service), or QuickBooks Enhanced Payroll (DIY).

  • If you use QuickBooks Assisted Payroll, all paychecks created in QuickBooks, including paper checks or direct deposit checks, need to be submitted to Intuit before 5:00 pm PT, at least 2 banking days prior to the check date. If any paychecks (excluding termination paychecks) are not sent 2 banking days prior to the check date, a Late Payroll Processing Fee will be created. This deadline allows Intuit to process the payroll taxes on time and ensure tax filings submitted on your behalf are also on time.
  • If you use Enhanced Payroll, only direct deposit paychecks are required to be submitted to Intuit before 5:00 pm PT, at least 2 banking days prior to the paycheck date. Submitting direct deposit paychecks late will prevent your employees from receiving the funds on time, however, you will not be charged any late processing fees. If you only create paper paychecks, you may create them on the same day as their check date.
Note: A banking day is a banking business day (Monday through Friday) that does not fall on a Federal Reserve Federal holiday, or a state or local holiday.

Negative impacts of transmitting late payroll:

  • Direct deposits take two banking days to post, so employees may not get paid on time.
  • Possible tax amendments, penalties, or interest can occur if filing submissions were incorrect. Fees, penalties, and interest caused will not be Intuit's responsibility. You may also have to pay service fees for filing amendments.
  • For Assisted payroll, a Late Payroll Processing Fee will be assessed.

 

Implications of not submitting direct deposit paychecks on time

Intuit and banks take at least 2 banking days to process a direct deposit. Not allowing 2 banking days means that your employees will not get paid on the date of the check. In most cases, the funds will appear in the employee's account 2 banking days after the payroll is processed. For example, if your checks are dated for a Friday, and you submit direct deposit to Intuit on a Thursday, the employees will not receive the funds until the following banking day (typically Monday).

Example:For a Friday paycheck date, paychecks should be transmitted to Intuit before 5:00 p.m. Pacific Time on a Wednesday. If you send a paycheck after the 5:00 p.m. Pacific Time deadline on Wednesday or any time on Thursday or later, it's considered a late payroll since there was less than two banking days between the day you transmitted the paycheck and the effective date of the paycheck.

Backdate fee is only processed for Assisted Payroll.

Remember to adjust your payroll schedule to take into account for holidays. See Federal Reserve Federal holiday calendar.

In the above Friday pay date example, if there is a Thursday holiday, you will need to transmit your paychecks before 5:00 PM Pacific Time on Tuesday to meet the submission deadline.

Sending late paychecks affects tax filings and payments

The impact of transmitting a late payroll or recording a paycheck after the pay date depends on several factors such as:

  • Your tax agency and your tax payment frequency
  • Whether you are processing filings on your own behalf or having Intuit file them for you (e.g., if you are on the Assisted Payroll service)
  • Whether the late paycheck is from a prior filing quarter or filing year (e.g., you create a check in July for a June pay date)

Since tax agencies calculate payments based on the check date, not the pay period date, late paychecks will often result in a late payment to state or federal agencies. Late payments can result in agency notices, fees, penalties, and interest. Amendments may also be necessary if tax filings have been completed.Important: Any fees, penalties, or interest due to the agency will not be Intuit's responsibility. Assisted Payroll customers should contact us to process and file tax amendments. Failure to contact us could possibly void your service agreement with Intuit.

Situations that qualify for payroll processing exceptions

  1. Termination Checks: Employers often need to create a same-day check for employees that are released. Customers will not be charged an additional backdate fee if the following conditions are met:
    • The employees in the payroll run have release dates entered into their profile settings.
    • The check date is NOT in the past (so it is dated today or tomorrow)Refer to our article on Termination checks for additional information on how to finalize payroll for released employees.
  2. Same-day pay: If an employee needs a paycheck for the same day and is not a released employee, consider using the payroll advance and repayment feature in QuickBooks Desktop.
  3. Payroll corrections: Some payroll errors can be adjusted or corrected on upcoming paychecks or through an unscheduled payroll.
  4. Performance-based pay: Some employees such as corporate officers may receive pay that is based on company revenues or quarterly profit. Your accountant may want to wait until after the quarter revenue has been calculated to create a paycheck, and then ask you to date your distribution checks so that they fall within the end of the quarter or fiscal year. You should work with your Accountant to review options that avoid creating the paycheck after the desired pay date.
  5. Prior Quarter Payments: You may need to add pay to an employee for work done in a prior quarter. These payments need to be recorded in the quarter they were received which can result in tax amendments. Please check with your Accountant to be sure late processing or backdating payroll is required.
  6. Cash Flow: You are required to backdate payroll checks because of cash flow problems. For Assisted Payroll, due to the two-business day processing requirement to process payroll, you may want to consider other Intuit Payroll offerings that allow you to process your own payroll and tax filings.

For QuickBooks Desktop Payroll Assisted, Intuit will not consider waiving the fee for late payroll processing unless it is due to an Intuit error or arrangements have been made in advance with Intuit.

Where to find a late payroll processing fee in QuickBooks

For Assisted Payroll only: You can find the late payroll processing fee under the Expenses tab on the QuickBooks Desktop Service Liability Check. There you will find the Payroll Service Fee.

What not to do if you cannot avoid creating a late paycheck

It is important NOT to do either of the following:

  1. Do not give your employee a paper check with an earlier date than the date on the payroll you transmit to Intuit.
  2. Do not issue a paycheck outside the payroll module. If you want to create a paycheck for an employee, you should do so only through the payroll module.

If you do not accurately report paycheck wages for your employees, the information you transmit to Intuit will not match the dates the employees were paid. If you are subject to an audit by a government agency, this could be considered tax fraud, regardless of intent, since it may appear like an attempt to avoid payroll taxes. You may also be subject to penalty fines and interest for incorrect or late filings and payments.

For QuickBooks Desktop Payroll Assisted: If there is an unavoidable reason for you to backdate, before doing so, please contact the QuickBooks Desktop Assisted Payroll Support team. We can help you through the process to make it as easy as possible for you.

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