Manual QuickBooks Payroll

Jennifer answers a reader's question about
manual QuickBooks payroll.

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Question About Computing Payroll Taxes using Manual QuickBooks Payroll.

Chip writes:

I decided to do payroll manually in QB. Am I forced to calculate ALL of the deductions? Do I have to manually calculate simple percentages for every check, as well as federal and state withholding? Since I'm familiar with payroll and taxation, I can handle this on my own for as long as I need to. Thanks. ~Chip

My reply:

1. Yep - it's all up to you baby!

By choosing the most basic and free option for payroll in QB, you selected to compute ALL of the payroll taxes manually for every check, every payroll. As you probably can see, this will get very tedious if you pay by the hour (and if the hours change from payroll to payroll).

The reason Intuit must charge for payroll tax calculations is that payroll is a nightmare of federal, state, and local laws. Keeping up with all of the various tax payment schedules, tax reporting, and other regulatory requirements is truly a difficult maze to navigate.

2. Outsource your payroll.

I highly suggest you immediately sign up for a paid payroll service. My first choice is QuickBooks Assisted Payroll, but another good choice is Paycycle payroll.

  • QuickBooks payroll (Assisted) allows you to run payroll directly within the software. It has all the bells & whistles you might expect: direct deposit, electronic payroll tax payments, electronic payroll tax filing. All you have to do is run the payroll with a few clicks of the mouse. All the rest is taken care of for you.
  • Paycycle payroll is web-based, so you can run it from any computer. It's a little less expensive, but has still most of the bells and whistles - direct deposit, electronic tax payments, electronic tax filing. Unlike Assisted, you have to authorize these in a timely way. Paycycle is very good about sending reminder emails to notify when it's time to do everything. It also provides an optional import file, so you can import payroll transactions into your QB file. This eliminates the hassle of manual payroll entries.

Payroll is too important to let an untrained clerk do it...

...and that clerk would be you! I'm sure you are very good at what you do, but payroll is not your core competency. I am trained in payroll - it IS one of my core competencies - and I never do payroll manually for myself or anybody else. Don't find yourself in a situation where you pinched pennies to burn dollars - the penalties for missing tax payment deadlines are quite steep and are not deductible. Outsourcing payroll really is better.

Take care and thanks for writing!

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