Set up a new employee
This article will give you the instructions on how to set up, add or enter a new employee in QuickBooks Desktop.
You can add or edit your employee's payroll information
Your employee has filled out all necessary new hire forms: I-9, Form W-4; and any state withholding allowance forms.
When creating a new employee or editing an existing one, you can enter payroll information in any one of six areas.
Enter the employee's name and Social Security Number. The other fields are optional.
Address & Contact
Enter the employee's home address, email address, and phone numbers.
Types of employee compensations:
- Regular earnings for an hourly employee is defined as the employee s hourly rate multiplied by the number of hours worked during the payroll period.
- Salaried employees receive a fixed amount for each payroll period, whether weekly, bi-weekly, semi- monthly, or monthly.
- The payment of commission as remuneration for services rendered or products sold is a common way to reward sales people. Payments often will be calculated on the basis of a percentage of the goods sold. This is a way for firms to solve the principal agent problem, by attempting to realign employees' interests with those of the firm.
- Bonus/tip refers to extra pay due to good performance or money or an equivalent given in addition to an employee's usual compensation.
Enter the employee's hire date, release date (when applicable), and employment type.
In QuickBooks Desktop 2015 and later, the following tabs have been added:
- Leave of Absence: Enter the employee's leave details when applicable.
- Termination: If an employee gets terminated, enter the termination dates and details.
Note: If a release date is entered, you must remove it before you can pay the employee.
Workers Compensation (QuickBooks Desktop Payroll Assisted and Enhanced Payroll only)
To add a new employee:
Open the New Employee window:
- From the menus at the top, click Employees > Employee Center
- At the upper left of the Employee Center, select New Employee.
Go to Personal tab. Complete the fields in the tab.
Click the Address & Contact tab and complete the fields in the tab.
Click the Additional Info tab, and enter any information you want to store for the employee.
- Enter information need in CUSTOM FIELDS, and/or click Define Fields to add custom fields to track employee information, such as birthday or spouse's name.
Click the Payroll Info tab. Enter applicable information regarding compensation and benefits.
- In the Earnings section, click the Item Name dropdown button.
- Select or add an item, and enter the Hourly/Annual Rate.
- In the Additions, Deductions and Company Contributions section, click the Item Name dropdown button.
- Example: medical, 401 (k), wage garnishment, etc.
- Select or add an item, and enter the Amount and Limit for every item selected or added.
- Click the Payroll Schedule dropdown button, and select or add a new schedule.
- Click the Pay Frequency dropdown button, and select or add a new frequency.
- Click the Class dropdown button, and select or add a new class.
- Click Taxes button to set up Federal, State and Other taxes.
- Got a VISA employee? If you have an employee on a VISA click to remove the taxes they are not subject to. Not sure which taxes to select? Contact your accountant or tax professional and check out our helpful list of IRS articles. If you have QuickBooks Desktop Payroll Assisted, you must contact us to remove taxes paid by the payroll service.
Be sure you select the State Worked and State Subject to Withholding tax code, even if there are no state income taxes (states without state income taxes include TX, FL, SD, WA, TN, NH, AK and NV). This ensures that Intuit files properly for this employee and your company.
Review the screens carefully and look for new options that may appear when choosing a State Worked and State Subject to Withholding tax code. You may have additional fields to complete.
When you set up an employee in a new state, you are prompted to set up the state taxes if the information is not already entered. If you do not enter a state ID for a tax item, QuickBooks Desktop will display the following message:
Does either of the following apply to your company
- I am in the process of applying for my state tax ID.
- My company is exempt from this tax.
If you have your state tax ID, click No and enter the ID number. If you are in the process of applying for the state tax ID number, click Yes to continue.
If your employee lives and works in different states (or your company is in a different state than where your employee lives or works) your State Worked and State Subject to Withholding tax codes could depend on reciprocal agreements. See Multi-State withholding responsibilities and QuickBooks Desktop Payroll: Multi-State Employer Unemployment Insurance Requirements for more information.
- Click OK.
- Click Sick/Vacation button, and setup the sick and vacation information.
- Click OK.
- Click Direct Deposit button, and enter the employee's direct deposit bank account information. See also Direct Deposit requirements, signup, and activation.
- Click OK.
Click the Employment Info tab.
- Select Hire Date.
- Select Release Date for terminated employees.
- In the Employment Details section, select from the Type dropdown list.
Click OK to save, or click Next to add another employee to the list.
Want to set up employee defaults?
- Click Edit > Preferences.
- Click Payroll & Employees.
- Click the Company Preferences tab.
- Click the Employee Defaults button.
- Add or make changes to the Employee default profile.
- Click OK twice to save your changes.