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Setting Up Employees: Part I of II

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We have discussed the first task in setting up payroll in QuickBooks – setting up payroll items in the previous blog.
The second payroll task, Setting Up Employees, will be discussed here.  There are two (2) parts of Setting Up Employees:

  1. Setting Employee Defaults - which is discussed here, and
  2. Creating Employee Records - which will be discussed in the next blog.

For most businesses, a common payroll items are usually set up for all employees. Instead of adding these items to each employee, QuickBooks make it easy by letting us assigning payroll items in Employee Defaults window:

Go to Edit > Preferences > Payroll & Employees, select Company Preferences and click Employee Defaults button, or
Go to Employee Centre > Manage Employee Information, select Change New Employee Default Setting:

QB Setup Employee I-1


Earnings pane. Select your payroll item from Item Name drop-down list.
In the Hourly/Annual Rate, enter rate if there is one (e.g. Hourly Wage) or leave it blank if you don’t have one (e.g. Salary).

Payroll Schedule. Select Payroll Schedule from the list or <Add New> to open New Payroll Schedule window:

QB Setup Employee I-2


Enter the name of your Payroll Schedule, pay period end date, and date on pay cheques in the respective fields. Click OK.

Pay Frequency. If you created Payroll Schedule, this field will be filled in automatically. Otherwise, select the frequency.

Class. Choose the class in you activate and use class.

Use time date to create pay cheques. Tick this box if you are using time tracking features to pay employees.

Additions, Deductions, and Company Contributions pane. Select the payroll item from the Item Name drop-down menu. Click <Add New> if you want to add a new payroll item.

Taxes. Click this button to open Taxes Defaults window:
As you can see, it shows all required taxes in BC.

QB Setup Employee I-3


If you need to add other taxes, go to Other Taxes pane and select it from the Item Name. Fill in corresponding Amount and Limit if there is any.

Accrual Hours… Use this to open Accrual Hours Defaults window to enter sick hour’s criteria.

QB Setup Employee I-4


Vacation Pay … Use this to open Vacation Defaults window and enter vacation pay criteria.

QB Setup Employee I-5


Click OK when you are done.  
The next time you create your new employee, QuickBooks will populate this Employee Defaults value you just created to your employee.

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