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    Set up and edit Workers' Compensation

    Article ID: 1000753


    If you have more than one Workers Compensation provider, you can only set up QuickBooks to handle one. You must calculate Workers Compensation for your other providers manually.


    Workers Compensation Setup or Feature in QuickBooks is available only to Enhanced and Assisted Payroll subscribers.

    Choose Edit > Preferences.

    Select Payroll and Employees on the left, and then click the Company Preferences tab.

    Click the Workers Compensation button.

    If you want to track Workers Compensation, select the Track Workers Comp box. (Alternately, if you want to disable Workers Compensation, click to clear the box.)

    If you want to track Workers Compensation, select the Track Workers Comp box. (Alternately, if you want to disable Workers Compensation, click to clear the box.)

    • Display message to assign codes - to display Workers' Comp messaging in QuickBoooks
    • Exclude overtime premium from Workers Comp calculation - so this item will show up on your report as a separate item.
    QuickBooks does not track annual limits for Workers Compensation calculations. You must track these manually.

    Click OK.

    Choose Employees > Workers Compensation > Manually Track Existing Workers' Comp Policy.

    Complete the wizard to set up Workers Compensation. Different employees might have different Workers Comp codes. This wizard allows you to set up a code for each employee.

    If you want to separate overtime premiums from standard premiums, in the Workers Compensation Setup wizard select:

    1. On the Overtime Payments window: Yes.

    2. On the Overtime Premiums and Workers Compensation Calculations window: No, I exclude overtime premiums from my calculations. If you select this option to exclude the premium for overtime, this item will show up on your report as a separate item

    Click Employees on the top menu bar.

    Move your pointer over Workers Compensation and select Workers Comp List.

    To add a new or edit an existing code, click the Workers Comp Code button at the bottom left, and then select New or Edit Workers Comp Code.

    To edit the Experience Modification factor, click the Experience Modification button on the bottom and select Edit.

    • If the experience modification factor is 1.25, then the rate should be 125%.This is a 25% increase in the Workers Compensation premium. If the factor is .81, then the rate should be 81%. This is a 19% decrease in the Workers Compensation premium.
    • Entering a date in the past for the Experience Modification has no effect on payroll dated earlier than the current date.
    • QuickBooks cannot track more than one experience modification factor at a time.

    When you are finished, close the Workers Comp Code List window.

    Intuit does not have any information on codes for each state. This information can be obtained from your Workers Comp provider.
    QuickBooks only allows you to assign one workers compensation code to each employee, which typically is their main line of work. If an employee needs an additional Workers Compensation code assigned to hours worked, you can add the code manually to the paycheck when you create it. (See steps below.)

    Manually add WC Codes when creating paychecks:

    If an employee has a default workers compensation code applied, that code appears automatically in the WC Code column of the Earnings section. The WC Code column appears in the Preview Paycheck window when the manual Workers Compensation feature is turned on.

    If an employee doesn't have a workers compensation code applied, or if their code varies depending the particular task they perform during a given pay period, you can assign workers compensation codes for individual earnings directly to a pay check.

    To add WC codes directly to paychecks, complete the following steps:
    1. Open the Preview Paycheck window, and look at the Earnings section.
    2. Click the row of the earnings item to which you want to assign a workers compensation code.

    3. Click the drop-down arrow in the WC code column and select the correct WC code for the work completed. (If the code isn't set up in QuickBooks already, click Add New to create the new code.)

    4. Once the correct WC code has been applied and all payment info has been added, click Save & Close.

    Click the Lists drop-down menu, select Payroll Item List.

    Double-click on the Workers Compensation item. This will bring up an Edit Payroll Item window.

    Click Next.

    To ensure that Workers Compensation will track by class select Track Expenses By Job.

    Click Next and then Finish.

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