Employee Compensation Getting Complex? Add Payroll Items

Payroll items processing can get complicated. Here’s how to handle the inevitable exceptions.
QuickBooks is accommodating enough when you first start using payroll. It includes a thorough setup wizard and creates the accounts and payroll items you’ll need to track your expenses.

But there are myriad situations where you’ll have to add or subtract dollar amounts from employees’ regular paychecks. There may be advances, reimbursements, wage garnishments, and other deductions that you’ll need to process. When these occur, you can easily expand your library of payroll items so that your wage and tax information remains accurate.

Lots of Clicks Required
Let’s say that some of your employees have decided to make a $5 donation every pay period to a local food shelf; the deductions will max out at $20. Click Lists | Payroll Item List to see what’s already been created for you automatically.
Right-click anywhere within the list and select New. The Add new payroll item window opens. Click EZ Setup (if you anticipate that your item will be especially complex, let us help you through Custom Setup).


You can choose from a variety of payroll item types in QuickBooks.

Click Next | Other Deductions | Next, and QuickBooks will launch the Payroll Setup wizard. When the Add New window appears, click Donation to Charity | Next. Enter the name of the charity and any account number they’ve given you, and select the button next to Weekly, on Monday where it asks for payment frequency. Click Next | Finish. The wizard closes.

Detail Work

Open the Payroll Item list again and right-click on your new entry; then Edit Payroll Item. Type in a name and click Next. Keep clicking Next through the next three screens until you get to Calculate based on quantity. Click Neither since it’s a flat amount, and advance to the next screen, where you’ll decide whether to deduct from gross or net pay. Enter the Default rate and limit on the next screen and uncheck the annual limit box. Click Finish.


Tell QuickBooks how much to deduct and for how long.

Not done yet. You still have to indicate which employees are taking the deduction. Go to the Employee Center and select a staff member. Click the Edit icon in the upper right, then Payroll Info. Select the first open space in the Additions, Deductions… column, access the drop-down menu select the charity, then click OK.

The next time you process paychecks, the donation should appear in the Preview Paycheck window. All of this back and forth can be confusing, but your data entry here must be correct. Questions? We’re here.

Gita Faust

About the Author

Gita Faust has over 30 years of accounting experience in the real estate and property management industry, Gita Faust is more than just a real estate investor; she is also popular for her work as an accountant, consultant, mentor, speaker, QuickBooks Top ProAdvisor, QuickBooks Solution Provider, member of Intuit’s Trainer/Writer Network, and, of course, author. Gita is well-known for her exemplary leadership and advisory skills. In fact, she even helped pioneer the adaptation of QuickBooks to suit the needs of professionals in real estate and property management. To share her knowledge she has written a series of courses titled Simplified Accounting Solution, which provides step-by-step guidance for those working with QuickBooks.

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