Setting up your payroll items The importance of payroll items Payroll items are the building blocks of your payroll system. When you create any kind of payroll transaction in QuickBooks—whether it’s a pay cheque, a payroll liability payment, or an adjustment at setup time or later—you use payroll items to do it (in the same way that sales forms use service and inventory items). There are payroll items to track employee compensation (salaries and wages), amounts you withhold from employee pay cheques (income tax and other liabilities), employer-paid expenses (such as company-paid benefits), and additions and deductions (such as bonuses and loan repayments). QuickBooks uses payroll items to track both the individual amounts on a pay cheque and accumulated year-to-date amounts for each employee. QuickBooks displays your payroll items on the Payroll Item list. The names of the payroll items are what you’ll see on pay cheques and in payroll reports. QuickBooks identifies payroll transactions by their use of payroll items: ■
Payroll reports include only transactions that use payroll items.
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Payroll liability balances are based on transactions that use payroll items.
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Employee year-to-date amounts are based on transactions that use payroll items.
When the payroll feature is turned on, QuickBooks creates the Payroll Item list with some standard payroll items. You can add payroll items to this list.
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Payroll items
payroll items, defined
About the default payroll items When you first turn on the payroll feature, QuickBooks creates the Payroll Item list with some standard payroll items. These include:
Payroll item name
Type
Use for
Sick Salary
Yearly Salary
Accrued time (such as sick time) paid out to a salaried employee
Vacation Salary
Yearly Salary
Vacation pay paid out to a salaried employee who is on vacation
Sick Hourly Rate
Hourly Wage
Accrued time (such as sick time) paid out to an hourly employee
Setting up your payroll items
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