Summary
Highlights
The video introduces how QuickBooks handles payroll, including computing gross earnings, determining withholdings, calculating net pay, recording transactions, and preparing compliance reports. It details the initial setup process, which involves enabling the payroll feature, customizing accounts, choosing a payroll service, or activating manual entries, and establishing payroll items.
This section contrasts laborious manual payroll systems, which require detailed calculations and record-keeping for each employee, with modern solutions like QuickBooks that allow companies to process payroll in-house, reducing the need for external firms.
The video defines essential payroll terms such as gross pay and net pay. It also explains various taxes, including FICA (Social Security and Medicare) and their rates, Federal and State Income Tax, Federal Unemployment Tax Act (FUTA), State Unemployment Insurance (SUI), and State Disability Insurance, along with common company deductions.
This part guides users through activating the payroll feature in QuickBooks via the Preferences menu. It then demonstrates how to update the Chart of Accounts by renumbering existing payroll liability and expense accounts and adding several new subaccounts for specific taxes (Social Sec/Medicare Tax Payable, FIT Payable, SIT Payable, FUTA Payable, SUI Payable, Salaries and Wages Expense, Social Sec/Medicare Tax Expense, FUTA Expense, and SUI Expense).
The video explains how to set up QuickBooks for manual payroll processing, detailing the steps to activate manual calculations through the QuickBooks Help menu. This section is for users who prefer to handle calculations themselves rather than using QuickBooks' paid payroll services.
This segment focuses on editing existing payroll items, specifically Federal Withholding, Social Security Company, Medicare Company, and Federal Unemployment. It details how to link these items to the correct agencies (United States Treasury) and assign them to the appropriate liability and expense accounts within the Chart of Accounts.
The video demonstrates how to add new payroll items to the list. It covers adding 'Salary' as a wage item, linking it to the Salaries and Wages Expense account, and then adding 'State Withholding' for Minnesota, specifying the agency, tax ID number, and liability account.
This section continues with adding new payroll items, specifically 'Hourly Wages' and 'State Unemployment' (SUI) for Minnesota. It guides users through setting up the expense accounts and liability accounts, as well as confirming tax rates and applicable wage types (Salary and Hourly Wages) for SUI.
The final part of the video instructs users on how to view the updated Payroll Item Listing report and save it as a PDF for their records, ensuring all changes are documented.