D o i n g p a y r o l l w i t h Q u i c k B o o k s

Transcription

1 D o i n g p a y r o l l w i t h Q u i c k B o o k s 6 Since the employee is being paid four times a month we should reduce the deductions and benefit taken from or added to each pay cheque to look something like this. Your screen should resemble the following graphic Click OK.

2 8 Select Reynaldo Lopez from the Employees tab and click Edit Employee. L E S S O N In the Edit Employee window, choose Payroll Info from the list of the left of the page. 10 From the Payroll Schedule drop-down list, select Weekly to change the payroll schedule. Notice that QuickBooks changes the Pay Frequency to Weekly. 11 Make the other monthly to weekly change outlined above in the Additions & Deductions table for Kelly Lawson and then click OK. 12 Leave the Employee Centre open. You ll use it in the next exercise. You now have Two weekly employees. We will add another shortly. Creating defaults settings for weekly employees. Creating new employees will be much more efficient if you create a default settings profile for Weekly employees. To create a weekly employee default settings profile: 1 With the Employee Centre displayed, click Manage Employee Information. and choose Change New Employee Default Settings The Employee Defaults window appears. 2 In the Payroll Schedule window click the down arrow and choose Weekly. 3 Change the Performance Bonus to per week with a Limit of 600 and add the other deductions and additions shown here. Your Weekly default settings should look like this: 253

3 D o i n g p a y r o l l w i t h Q u i c k B o o k s your company. (The funds you deduct from employee pay cheques aren t considered an actual cost because they re monies you re holding for the government; they don t come directly from your company assets.) Whenever you run your payroll, QuickBooks keeps track of your company s expenses for each employee. You can then see totals for these expenses on the payroll summary by employee report and on the profit and loss statement. QuickBooks uses the Payroll Liabilities account (an Other Current Liability account) to track what you owe to the government. When you do your payroll, QuickBooks calculates how much you owe for each tax, deduction, or company contribution payroll item and records that information as a transaction in the liability account. This produces a record of how much tax you owe at any time, so you can plan to have the cash available for payment. When you pay your payroll taxes or other payroll liabilities, QuickBooks decreases the balance of the liability account. Look at the payroll expense and liability accounts, so you can see how QuickBooks recorded expenses and liabilities related to Michael White s pay cheque. To display the payroll expenses QuickReport: 1 In the Chart of Accounts window, select the Payroll Expenses account from the Expenses section. 2 From the Reports menu button, choose QuickReport: Payroll Expenses. 3 From the Dates drop-down menu, choose Custom, enter 1/1/2014 in the From field, and 1/31/2014 in the To field. Press Tab. Click Refresh if necessary QuickBooks displays the QuickReport. You can scroll through the report to see the items paid by the company. 262

4 4 Close the QuickReport. L E S S O N In the Chart of Accounts, double-click the Payroll Liabilities account in the section. QuickBooks displays the register for the account. Scroll to find the items for Reynaldo Lopez s pay cheque. The register shows a separate transaction for each item from Reynaldo s pay cheque. The running balance shows an increase for every liability. 6 Close the register. 7 Close the Chart of Accounts. QuickStart Tip The Employee Earnings Summary report summarizes the wages, taxes, and adjustments, the gross pay (total and adjusted), and the taxes withheld for each employee and the entire company. The Payroll Summary report shows information similar to the employee earnings summary report, but in a much different layout. The report has a column for each employee and a row for each payroll item. To create either of these reports, choose Employees & Payroll from the Reports menu. Paying payroll taxes As long as you have a valid subscription to one of the Intuit Payroll Services, QuickBooks uses current tax tables to keep track of your tax liabilities as they accrue, so you know how much you owe at any time. Preparing a PD7A Report Along with your liability cheque, you ll need to submit a PD7A (Current Source Deductions Remittance) form to the CRA. On this form, you report the federal income tax amounts, EI premiums, and CPP contributions you withheld from your employees pay cheques over the past month. To help you prepare this form, QuickBooks provides a PD7A Summary Report. 263

5 D o i n g p a y r o l l w i t h Q u i c k B o o k s Creating a PD7A Summary Report: 1 From the Reports menu, choose Employees & Payroll, then PD7A Report. 2 In the Dates field, select Custom. In the From field type 01/01/2014, in the To field, type 1/31/2014, and then click Refresh. QuickBooks displays a summary of the income tax, pension plan contributions, and Employment Insurance premiums that you ve withheld from employee pay cheques, as well as the company contributions. Your screen should look like the following. You will use the figures in the report to fill in your PD7A form. 3 Close the report. 4 Click No at the message asking if you d like to memorize the report. Figuring out what you owe If you re about to pay taxes or other liabilities, the payroll liabilities report shows you how much to pay. Suppose you are ready to make a tax payment, and you want to see how much you owe. 264 To create a payroll liabilities report: 5 From the Reports menu, choose Employees & Payroll, and then choose Payroll Liability Balances. 6 In the Dates field, select Custom, type 1/1/2014 in the From field and 12/31/2014 in the To field. Press Tab.

6 L E S S O N 1 2 QuickBooks displays a report that shows what you owe for each payroll item by month, as well as the balance. Writing a cheque for payroll taxes QuickBooks recommends that you set up scheduled tax payments for your payroll taxes. But you can also make an unscheduled tax payment if, for example, you don't have an active QuickBooks Payroll subscription, you have a payroll tax that isn't set up as a scheduled payment, or you need to make an adjustment to a payroll tax. When it s time to deposit payroll taxes with your deposit institution, use the Liability Cheque window to fill out a QuickBooks cheque. Note: Don t just open the Write Cheques window and write a cheque from there. QuickBooks can t properly adjust your Payroll Liabilities account unless you use the Pay Liabilities feature. To pay payroll liabilities: 1 From the Employees menu, choose Payroll Liabilities, and then click Pay Payroll Liabilities. QuickBooks displays the Select Date Range For Liabilities window. In the From field type 1/1/2014, and then type 1/31/2014 in the Through field. 2 Click OK. QuickBooks displays the Pay Liabilities window. Ensure the Payment Date is 2/15/ Click in the column to the left of the CPP-Company payroll item. QuickBooks places a checkmark in the column to show that the item will be paid. It also places checkmarks next to EI and Federal Income Tax items. Numbers are transferred to the Amt. To Pay column on each Receiver General line. Now your Pay Liabilities window should look like the following. 265

7 D o i n g p a y r o l l w i t h Q u i c k B o o k s 4 Make sure Review liability cheque to enter expenses/penalties is selected and then click Create which replaces Review when the dates are correct. QuickBooks displays the Liability Cheque - Chequing window, with your cheque displayed. 5 In the Memo field, type BN as a reference number for the CRA. 266

8 6 Click Save & Close to record the cheque. L E S S O N Click Yes if QuickBooks asks if you wish to record changes made to this transaction. Whenever you make a payment and record your cheque this way, QuickBooks decreases the balance of the Payroll Liabilities account. When you record the transaction, QuickBooks creates a journal entry. The following table shows the journal entry for the payroll liability transaction. Account Title Debit Credit Chequing $ Payroll Liabilities $ Preparing T4, T4 Summary, and Relevé 1 forms Preparing T4 slips At the end of the year, you ll need to provide T4 slips for your employees and the CRA. QuickBooks can help you create these. To create a T4 slip: 1 From the Employees menu, select Payroll Forms, then Process T4s. QuickBooks shows the Process End of Year Forms with T4 selected in the Form window. If a warning message appears, click OK. 2 Check that the Year drop-down menu is showing the correct year (for this example, 2014 though usually you would want the year that just finished). 3 Click in the checkmark column to the left of Sandra Adams. 4 Click the Review button to see Sandra s T4. 267