Quickbooks and payroll

This can get confusing, but I'll try my best... These go from cheapest to most expensive, and generally most time-consuming to least time-consuming.

1. The cheapest way to do payroll in QB is to enter payroll as standard checks (Not paychecks. You can use paychecks but be prepared for lots of annoyments.). You have to calculate and enter the tax amounts yourself. You can use memorized transactions to speed data entry. You also need to produce your own federal and state tax reports (941, W2, etc.). You will not be subject to payroll sunsetting (3 years) and will not need to upgrade QB for as long as you want.
2. Next up the ladder is to use the one-time payroll update that comes with QB that currently lasts through the first quarter of the year following the QB version. QB will calculate your payroll and produce federal tax forms. If tax rates or forms change during the year, your taxes may be incorrect. Sometimes this can be ignored, other times you will have to make edits. State taxes can be reported using one of the 3rd party reporting tools like:
   formatting link
   formatting link
   formatting link
   You will probably want to upgrade QB every year with this option.
3. The basic payroll, which you mention is currently 9/yr, is the same as directly above, except you get to keep your tax rates and federal tax forms current. You can get away with upgrading QB once every 3 years with this option.
4. Enhanced payroll, which starts at 9/yr, gets you built-in state reporting. You won't need the 3rd party tools -- at least for your state reports -- but it will generally cost quite a bit more.
5. There are more payroll service type options that I won't get into here.

Others -- feel free to correct any mistakes... :)

thank you for the reply.

under this scenario, the "one-time payroll update" would cost us how much?

The one-time payroll update is free, though it is confusing (probably by design) to get. You have to go through the process to buy the basic payroll option, but you just omit your payment (credit card) info and you will receive a single update. You also want to get the update AFTER Intuit has released the first payroll update for the tax year. For example, if one was to buy QB 2007 this month, you could currently only get a 2006 tax table. You have to wait until about the middle of December, when the 2007 tax table (and forms) becomes available.

Before doing this, you will want to turn-on shared downloads in the Options of the "Update QuickBooks" dialog. This will save your updates so you can back up the shared download folder. This will allow you to re-apply the one-time update if necessary in the future (new computer, etc.).

Although it is slightly more expensive, I think upgrading QB once every 3 years, but buying the basic payroll subscription is less hassle. You can try getting through the first year on the one-time update to save a couple hundred bucks.

great info - thanks again.

It *IS* (or can be) rocket surgery. Consider union fees, state and local income taxes, withholding for charitable contributions, medical care, garnishments, and dozens of other things. Now layer on top overtime, vacation pay, sick leave, holidays, shift differentials, yak-yak-yak.

As to why someone might need 13 downloads a year, consider why tax attorneys are called "loose-leaf lawyers." Their law books are three-ring binders because tax laws change (somewhere) EVERY DAY.

If you handle your payroll manually - and I'm not saying you can't - and screw up someone's paycheck, you may die. Unless you can point to some authority on which you relied (say, Intuit), you may very well be liable for all manner of sanctions.

wow - the above scenario is daunting. i don't necessarily mind paying the top tier premium ($299 or whatever it may be) to Intuit *if* it will handle all of the above with a minimun of hassle. will it?

Hello!

There are three main payroll products that Intuit offers. You can read about them and compare them at:

I hope this helps! Amy

Get the payroll module. You'll thank yourself every time you use it. You'll run payroll for five employees in under two minutes and your downloads will keep your tax tables up to date. You'll set up memorized payroll liabilities reports that you can email to your accountant that are fast, complete, and accurate as well...

I didn't mean to frighten you. If you keep a handgun in the office, you should be okay.

Hey, he said 5 employees. Small shop exceptions apply. The real question to ask is how many salary (easy) and how many hourly (moderate). Next question is how is sick/vacation accrued. As long as this stuff isn't done like a 1000 person firm would do it, doing manual shouldn't be that hard.

Any business that has grown to the point where they have 5 employees and does payroll in-house should not do payroll manually. The investment in a payroll subscription is too small to justify doing it any other way.

I agree. There are lots of things in life that are not too hard and most could do them were it not for a) the time/cost or b) the consequences of a mistake. For example:

1. Replacing brake shoes,
2. Excising a wart,
3. Giving kitty a pill,
4. Rewiring a house,
5. Flying a plane,
6. Protesting at a KKK rally,
7. Dry-cleaning your clothes,
8. Growing your own watermelons in your apartment window-box,
9. Twirling a Glock on your finger,
10. Using the word "nigardly" at a D.C. city council meeting,
11. Self-insurance for your place of business,
12. Having "Leonardo" tattooed on your butt (teen-age girls only),
13. Calling your passion-mate anything other than "darling" at THE moment.

But you are correct. Before computers, General Motors was doing payroll for hundreds of thousands of employees by hand, so, sure, it can be done. And soon, if current projections come to pass, General Motors will be doing payroll by hand once again.

Enjoyed that, thanx!

-Mark Bole