Enter Payroll For Second Month 8380 QuickBooks Online 2022

QuickBooks Online 2022 Enter payroll for second month, get ready because it’s go time with QuickBooks Online 2022. Here we are in our get great guitars practice file that we set up with a 30 day free trial holding down control scrolling up just a bit to get to that one to 5%. We’re currently on the homepage, otherwise known as the get things done page.


You wanted to change to the accounting view, it’s something you can do by going to the cog up top, going down to the switch to the accounting view down below, we will be toggling back and forth between the two views, either here or by jump into the sample company file, which is currently in the accounting view.



Let’s open a few tabs that we can put some reports in right clicking on the tab up top to do so duplicating it back to the tab to the left, right clicking on it again, duplicating it again back to the tab to the left one more time right clicking on it duplicating.



Again, as that is thinking, let’s see where the reports are located in the accounting view, by going to the sample company, which is in the accounting view, they’re located down here under Reports.



If we go to the Business View, they’re a bit deeper down of a dive, but not too deep. It’s in the business overview left hand side, we’re currently in the second tab, we’re going to go to the reports. And let’s open up the good old balance sheet report.



The balance sheet report. Yes, I know that was unexpected. But that’s the one this time we’re going to look at Oh 101 to two to 1231 to two, we’re going to run it running it, we’re going to go to the tab to the right tab, right. And then business overview.



Again, this time, we’re going to open up, it’s no shock whatsoever. The Profit and Loss income statement, pe l do the range change from 1012 to 202 28 to two, let’s do the month by month report.



And so we can see the side by side, as they say, We got Jan, we got fed, we got the total, we’re in the month of February, run to the payroll, let’s go to the tab to the right. And then go into the reports. Again, business overview. We’re looking at those reports, we’re looking at you reports.



That’s right, we’re looking at you. Let’s type in trial balance. So we can find the trial balance and open it up. Trust the TI B trial balance during the range change from Oh 101 to two to 1231 to two, run it. Let’s go on back to the first tab, we’re now going to be processing the payroll looking at the running of the payroll for the second month. So we ran payroll for the first month.



Now we’re processing it for the second remember, payroll is going to be an add on type of feature, we were able to add it on tack it on with our 30 day free trials, we’re testing it out if you have access to it in that way. That is great before you set up payroll. In practice, however, I would talk to a CPA,



someone who you’re not planning on actually processing your payroll with so that they can give you an independent decision as to whether you should process it through QuickBooks, or possibly have a third party like an ADP or a paychecks, then go in and set up your payroll.



Remember, in payroll being one of those things, which I would say you want to measure twice, cut once, not one of those things you want to tinker with until you get it right. Because that’ll that’ll cost you more that way. It’s one of those types of things, it’s better to get it right the first time most of the time.



So we’ve got our payroll setup down here. And we went through the setup process, notice that we don’t have everything completely set up to pay the taxes, we still have our open items like the 401k, the workers comp policy, we need some, you know some of our business data information to complete this.



And normally they would want to connect to to the bank account and so on for the direct deposit and the liabilities, which we’ll talk about next time.



We set up enough here so that we can basically process the payroll, get a taste for it, get a feel for it. If you want more detail on the payroll, we have a course on payroll.



But we want to get a general sense for the withholdings, how the withholdings work, and a better understanding of payroll is really helpful. Because whether you do payroll internally, you work in the payroll department or not have the payroll done externally. It’s good to know what’s going to be the impact on the financial statements.



Also, obviously, human resources and payroll in general are often areas where you can have most liability problems, it’s and so on. So you want to have a you want to have a good idea of it. So we’re gonna go into it here. We’re going to then run the payroll. Imagine we’re running the payroll, we could do that here.



We can go into the run payroll, go to run it. Payroll needs to be ran. It’s got too much energy. Let’s take it out for a run. And then we’re going to say this is going to be payroll period for February. Let’s say it’s going to be four February.



So we’ll pick up to one to 228. Remember, the payroll periods will change depending on what type of company you have, you could have most likely weekly, bi weekly, semi monthly or monthly payroll pay periods, we’re setting up a monthly pay period here. So we processed the payroll for the month of January, now processing for the month of February.



Now, if you have everything set up properly, that it should be pretty automated, after you have everything set up, it’s usually the setup process, that’s going to be the most difficult part.



And we should be able to, in essence, process the payroll by just basically running it at this point in time, and either having the cheque coming out of the direct deposit or have the manual check be processed.



But I’m going to go into it and look at this. And we might check change a few things to make it a generic problem because I already have my my stuff set up for the for the bank reconciliation and stuff.



So we’ve got the information up top the payroll time period, and, and then the pay date, these two don’t necessarily have to be the same, but they are in our practice problem. And then we’ve got the check, pay by cheque 3003 52.



That’s the net Check we’re looking at here, the gross pay is at the 4005 8333, the year to date, because there’s been two checks thus far 9000 166 6.66.



And then we’ve got the employee taxes, this is what’s being taken out of the employees checks, the federal income tax being a complicated tax that we’re dependent upon tables to calculate because it’s way too complicated to get right because it’s a progressive tax.



And that means it has progressive tax rates and all the other deductions and whatnot. So it’s we’re going to make it generic here though. And I already have this calculated in our in our book problem, that’s why I’m changing it, usually you would be dependent on the software to change it.



This is one of the places where QuickBooks makes its money by being able to populate that complex cell, as opposed to the other two taxes, which are more of a flat tax, therefore, easier to calculate.



So on these other two taxes, we could say for example, the 458 3.33 times point oh six two is going to be that 284 16. And the 458 3.33 times point, oh 145 Is that 66.47.






So those are pretty straightforward taxes. And then we have the California tax, which I’m going to remove because I want to make this as generic a problem as possible.



And the California taxes are going to be subject to California. So that means that if we pull out the trusty calculator here, once again, that we’ve got the gross pay of the 458 3.33, that pay is gross, it’s sticky, sticky, gross notes, gross pay minus 21050. point six two is going to be the 353 2.71.



That’s where we stand at this point in time that’s actually going to be coming out of the checking account and be handed over to the employee he in some way some shape or some form.



And then we’ve got the employer taxes down below which we are matching the Social Security and Medicare these are of course the taxes that are over and above what we owe to the employee and we’ll be broken out into their own expense account payroll taxes, these ones up top will not be in the expense account of payroll taxes but will be in the expense account of Payroll Expense wages,



because they’re not really our taxes were just the tool of the government that are collecting or withholding the taxes from the employee which are their taxes to pay them on their behalf.



And these taxes for some reason are charged to us not on our income but on our on an expense actually the expense of us paying our employees were taxed over and above that for the Social Security and Medicare.



Okay, so those are the changes I want to make. Let’s go ahead and save that and then we’re going to do a similar kind of adjustment for Erica let’s take a look at Erica over here and see what she’s got. So she’s we’re gonna say that she worked, how many hours she go into work. I’m going to save 100 160 hours she worked update the timesheet for accurate project.



Keep these hours. Okay once 60 hours at 15 and then we’re at the 2400 so the year to date is 4800. Now because there’s been two months, we’re going to look at her withholdings. So then once again we’ve got the federal federal withholdings that are calculated using the table. Usually we would let QuickBooks do that.



But I’m going to change it for the generic book problem two 360 that may or may be that may be wildly off compared to the to the W four but I’m doing that to reconcile to my bank reconciliation that I have put together.



Prior to this, so this is a generic problem. Calculating that remember, that’s really where QuickBooks often makes their money, because that’s a complicated tax to calculate. Whereas the Social Security and Medicare once again, are typically more straightforward to calculate.



Although there are still problems, you still want software to help you because there’s going to be caps on it, and plus up payments, and other kind of weird weirdness. So there’s the 148 80, that’s easy to calculate, we’ve got the 240 times 2.0145 1.45%, there’s the Hold on a second 240 turns 2.0145, the 34, there’s some for some reason they’re getting are there it is 3480.



And then the California Tax, I’m going to remove, because I’m making a generic, generic, we don’t have any other any other withholdings like 401 K’s in the practice problem, it’s so odd, they would act in a similar fashion as with the taxes, except that they are typically voluntary, instead of mandatory as taxes typically are, if it goes to the employee or taxes,



we’re matching these items down below, these are going to be what’s going to go into the payroll tax expense, which we are paying over and above, these are our taxes that we have to pay as the employer, these taxes up top are not in theory, our taxes, but rather the employee taxes, which we’re required to take from the employee before they get their little fingers on it.



Because that’s what the government makes us do. And then we pay it on their behalf as if the employees were children. So now we’re going to go ahead and say okay, and there’s going to be our two checks.



So let’s go ahead and run this thing. If I hit the drop down, here we can let’s, let’s go ahead and save it, I’ll say, No, I’ll say, preview the payroll, let’s go through the preview process.



And so this is what we’ve got on the Preview review, the submission total for the payroll looks good, it’s going to come out of our standard checking account pay periods for February date, 228, I think everything is the way things should be. If I select this, let’s go ahead and submit it.



Let’s do it. We’re going to do it here. Here we go. And so I’m going to go ahead and auto fill the check numbers autofill, the check numbers, and the autofill autofill. Okay.



And then if I look at these stubs, the print stubs, remember, we have to provide these to the employee in some way. So this is kind of a human resources requirement, so that they know what they earned and what we what we were required to take from them. So we had this as a year to date.



So we got the salary current, and then the cell and then the salary or wages or whatever year to date. And then we’ve got the taxes here on the current and the year to date numbers.



So you’re probably familiar with this kind of pay stubs, you need to provide this either electronically, or, or with the paper stub in some way. Okay, so let’s close this back out.



And go back to the first tab and go ahead and finish finish it, take payroll off your to do list, auto payroll is included at no extra cost. So you could set up the auto payroll and whatnot. But no, I’m not going to do it that probably that probably cost more and I’m on the free,



the free 30 day, remind me later, you can remind me later if you want. And then I’m going to go back to the let’s see with a check. So I’m going to hit the hamburger, hamburger and then take a look down here at the let’s like to go on the check register, which is in the bookkeeping area.



If you were in the accounting view, it would be in the accounting area, and then going into the trustee chart of the accounts. And then I’m going to go into the register here. Hold on, hold on a second, am I in the Chart of Accounts, this is the transactions, I want to go into the Chart of Accounts, and then close up the handbook. And then we can go into the checking account to check it out.



I like checking out the check in. So let’s do it. So there we’ve got our two our two checks. It didn’t have the check numbers. So I’m going to add the check numbers here. And I’m going to say the Erica’s is. So this one’s going to be 10 to two. I’m going to see if they let me add you. It says you can’t edit this field from here.



Well edit. I’ll edit it from here, then that’s what I’ll do if you’re going to be stubborn like that. This is going to be 1010 to two and then I’m going to say okay, and I want to put that in place because it’s going to tie out to my bank rec that we’ll see later on and the problem it kicked me out of the register.



So I’m going to go back into it bookkeeping down below. Go back into my register into the chart of the accounts and then go into the register again. And I’m going to change the number for Erricka, which is going to be 10 to three, so we’re gonna have to edit it. So edit it 10, two, three.



So we’re going to say 10, two, three. Alright, and so I’m going to say okay, so that’s good. And then I’m going to go to the next tab, let’s take a look at what happened on the balance sheet, I’m gonna refresh in this one up, run it, run EIN. And then I’m going to say that we can go into the checking account, the cash, of course, is going to go down by the net Check, by the net Check.



Now, I’m not going to drill down all the way on to that check. Because if I do, it keeps kicking me out of where I’m in. So I could see it. But I know that that those are the net checks after we had the withholdings. And so that’s good, then I’m going to go back up top the other side, if I go back to my reports, scroll up just a bit, it’s going to be on the income statement, go into the income statement.



Let’s run it and say it should be in the wages area. Under payroll, they give us a nice little subtotal, I kind of like it wages, we’ve got the two the two months, and then the total on the right hand side, let’s take a look at the month of Feb, the Feb activity. And there we have it. So now we’ve got the wages for Feb.



So then if I go back, if I go back, then I’m going to say that we have the taxes are going to be in here. So this is where the wages are going to be located, which is the gross pay. And then we have the taxes, which is what we paid over and above that what we had to pay. So if we go into here, we’ve got the taxes that would be in place. And then the difference between the two, if I go back on over is going to be on the liability side.



So if I go back to the balance sheet, and then we go into the liabilities down below, and say we’re going to go down so we can so that we can go in to the liabilities. So we’re looking here, the federal tax liabilities are going to include an increase for both the employee he withholdings the amounts that we took from the employer, ie, as well as for the employee or portion that were that we had to pay on our behalf, as well as the employee earnings.



Okay, so let’s go back on up, let’s go back to our report, holding ctrl scrolling up a bit. Now we can also open up the payroll liabilities or the payroll reports, I won’t go into them in detail, but I’m going to right click on the tab to the right, duplicate the tab. And then we’ll go into check out some payroll reports the payroll Summary Report, for example.



And to do that, let’s go into the reports on the left hand side. And then we’re going to say this is going to be payroll. So we’ll type in payroll, and we’ll look at the payroll summary by employee, let’s pick that one up, take a look at it.



Now I’m going to look at it just for February because you’ll recall that we made a little bit of an adjustment for January due to try to tie it into our practice problem. So it’s not going to be perfectly tying into the January because we kind of tweaked it away. So it would match with our practice problem.



We talked about that before. So I’m going to run this for February and say oh two, I got to do with a drop down. This is a picky report with a drop down thing. Okay, I’ll use your drop down if you want, if that’s the way you want to do it.



So remember, you can think of these reports as basically the payroll in total. And this is something that would be useful whether you run payroll in the system or outside the system, if you run it outside the system, meaning you run it in ADP or paychecks, they might provide you with a report like this.



And you need to basically make your financial statements proper. In other words, you often might want to think about payroll in terms of what’s the reporting like and in terms of the financial statements?



And is that correct? In that case, you often want to think about all of your employees as if they’re kind of like one lump sum. And then the other way you want to look at it is to get down to the nitty gritty, when you have to fulfill those requirements,



basically, for the reporting requirements, year to date reporting by employee by payroll period, and so on and so forth. So, so here, we can take a look at this, for example, for the second payroll period. And we can say for the two employees,



Adam and Erica, we have the adjusted gross wages, which we would expect to find in February on the income statement 6983 33 by going to the income statement for February,



and scroll down we’re going to say we’ve got then 6983 33 So that’s what we would expect on the financials and then we can say okay, the employee taxes, we can think about them in terms of the total here.



Now these are taxes that are going to increase the liability, but they’re not going to have an impact that will be broken out separately on the income statement, because they’re included and that 6983 33 Because they’re not our taxes, they’re the employee taxes. Therefore, for us on the expense side, they’re just recorded as expenses for the wages expense.



And then these taxes down below the 5343 22, our taxes we pay over and above, you would expect to find that on the income statement, you can break it out employee by employee tax by tax, but the total is the impact on the financial statement 534 22. So we would expect then the payroll tax by three 422.



Here, we would expect on the balance sheet to tie in, if we were to pull out the trusty calculator and do some trustee calculations with the trusty calculator, we can then say that the amount of withholdings that we took from the employee II was 159 4.22.



And our taxes, employee tax were five, three 4.22. So we would expect then the change or the February the February taxes on the balance sheet, to be that so if I went then in to the balance sheet account for the payroll liability account, where is that it’s right here, federal taxes, if I go into that,



and I’m going to try to change the date range just for the February to see the activity for February, oh, 201, to two to 1231 to to run it, scroll down. And we get that we get that’s the activity. That’s the increase that happened in February.



So that would make sense there. That’s the activity tying out to kind of your report, if you can tie out to the reports like that you probably do and more than most people can with the payroll people get confused with the payroll taxes, and so on and so forth.



So if you could do that that’s quite useful, especially even if you’re working with someone outside, like an outside payroll company like an ADP or paychecks, you still want to know what the impacts going to be on the financial statements.



Okay, so next time, we’re going to, we’re going to, we might have to make a little bit of an adjustment to tie into our practice problem again, but we’ll talk about that next time. And then we’re going to go into our trial balance for now. And let’s run this thing again. And this is where we stand as of this point in time.



So if your numbers tie out to these numbers, then we’re on the page we’re on there’s like one page, and we’re both on that same page, which is good. If they don’t, then try changing the date range.



It’s often a date range issue if you’re following along and we’ll be taking a look at the transaction detail list which is a good thing to detect and diagnose and something else with any kind of changes so we can check out the changes and dive a little bit deeper at that point.

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