How does payroll work in QuickBooks?
QuickBooks Payroll streamlines the entire employee payment and tax process by allowing you to set up your staff, monitor their working hours (particularly if you use QuickBooks Time), perform payroll runs with calculated pay by the system, and automatically submit taxes and forms, giving you a choice between self-service and a whole helping hand support.
In order for QuickBooks to handle your tax payments and filings, you must first register your employees and set up their payroll details in the Payroll Overview. Next, select staff, check the system-calculated pay (or enter hours/bonuses), preview, and submit payroll. The money will be taken out.
What does QuickBooks Payroll do?
QuickBooks payroll software is designed to calculate gross pay, withhold taxes and deductions, and create net pay for each employee automatically based on the schedule you set. It also tracks employer payroll liabilities, such as payroll taxes and benefits, so your books and payroll reports stay in sync.
QuickBooks Online Payroll allows users to have the payroll run, have the employees paid via direct deposit or check, and have the filing and preparation of various tax forms, depending on the chosen package. Desktop payroll provides similar basic functionalities, but it is installed on your local machine, and the payroll updates are provided through your subscription.
How payroll works step‑by‑step
Running payroll in QuickBooks generally follows four key steps:
- Turn on payroll and choose your plan inside your QuickBooks company file.
- Add employees, including pay rate, pay type (hourly or salary), and bank details if using direct deposit.
- Set pay schedules (weekly, bi‑weekly, monthly) and enter hours worked, overtime, bonuses, or reimbursements for each period.
- Review the payroll summary, approve the run, then print checks or submit direct deposits.
Key payroll setup tasks
Before running your first QuickBooks payroll, you need to:
- Enter business payroll details, such as legal name, address, and the bank account used to fund payroll.
- Configure payroll taxes, including federal and state or local tax settings, deposit schedules, and any required IDs.
- Set up pay types and benefits like overtime, bonus, mileage reimbursement, vacation pay, health insurance, or retirement plans.
These setup steps ensure QuickBooks can calculate every paycheck correctly and map each amount to the right general ledger account. Setting things up correctly also lowers the chances of making mistakes with tax withholdings and makes it easier to match up payroll in your profit and loss and balance sheet reports.
Key Benefits of Using QuickBooks Payroll
✔ Time Savings
Spreadsheets and manual calculations are over.
✔ Fewer Payroll Errors
With automated tax calculations and entries, accuracy increases dramatically.
✔ Direct Integration with QuickBooks
Payroll data syncs automatically with your books—making your accounting clean and accurate.
✔ Employee Convenience
Direct deposit and online access improve the employee experience.
✔ Compliance & Peace of Mind
QuickBooks helps ensure taxes are paid correctly and on time.
How do you do payroll for beginners?
Payroll for beginners sounds intimidating, but it’s really a step‑by‑step checklist you repeat every pay period. Once the basics are in place, paying employees becomes a straightforward routine instead of a stressful guessing game.
Tips to make beginner payroll easier
- Start with simple systems: a basic payroll tool or outsourcing service can automate the complex math.
- Standardize everything: one pay schedule, clear overtime rules, and consistent time‑tracking methods.
- Document your process: write down your “payroll checklist” so you can follow the same steps every time.
- Ask for help when needed: a bookkeeper, accountant, or payroll service can review your setup and confirm you are compliant.
By treating payroll as a structured checklist—collect info, track time, calculate pay, pay employees, send taxes, keep records—even a complete beginner can run payroll with confidence. Over time, you can add more advanced features like benefits, time‑off tracking, and detailed payroll reports, but the core steps stay the same.
Is QuickBooks phasing out payroll?
QuickBooks is not phasing out payroll entirely, but it is discontinuing support for payroll services in older QuickBooks Desktop versions like 2021 and 2022 after specific dates such as May 31, 2025, meaning those releases lose access to automatic tax updates, e-filing, direct deposit, and payroll calculations, prompting users to upgrade to current Desktop subscriptions or switch to QuickBooks Online Payroll, which remains fully supported with Core, Premium, and Elite plans receiving ongoing updates and features.
How much does QuickBooks payroll cost?
The three primary QuickBooks Online Payroll plans have a base monthly rate plus a per-employee fee. The most recent 2025 adjustments went into effect on July 1st for client-billed subscriptions and August 1st for accountant-billed subscriptions. Although special discounts or packages with QuickBooks Online accounting may reduce effective rates for new users, Core begins at $50 base + $6.50 per employee per month, Premium costs $88 a month plus $10 for each employee, and Elite costs $134 a month plus $12 for each employee.
Is QuickBooks Payroll easy?
QuickBooks Payroll is generally considered easy to use, especially for small businesses familiar with QuickBooks accounting, thanks to its intuitive interface, automated tax calculations, direct deposit setup, and seamless integration that handles most complex math automatically. User reviews from 2025 always praise how easy it is to set up employees, payroll run previews, and self-service options like pay stubs for workers, making it accessible even for beginners without prior payroll experience. Some users say there are small learning curves for more advanced features like custom deductions or holiday pay. However, general ratings show that the software is very easy to use, with scores between 8 and 9/10, and quick help from support staff for any problems.
Final Thoughts
QuickBooks Payroll simplifies one of the most complex aspects of running a business. With automated tax handling, fast payroll runs, and seamless integration with your accounting, it offers everything you need to pay your team accurately and stay compliant.
QuickBooks Payroll may assist you in maintaining organisation and self-assurance each pay period, regardless of the size of your workforce.
