We are a small company and are looking at various options for payroll; I’ve heard that there is a way to do payroll manually in QuickBooks, but I can’t seem to find any information on how to turn on that feature, everything seems to indicate that we have to buy a payroll subscription and that just isn’t in our budget right now. Can you help? Thanks in advance.

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How to turn on and use the manual payroll option in QuickBooks certainly feels like a highly guarded secret. Intuit makes a lot of money selling payroll subscriptions and rightly so as keeping up with payroll tax laws and forms in each and every state is a lot of work!

Even so, there are instances when a business chooses to have an outside payroll service do their payroll for them (maybe they get a break on their Worker’s Comp Insurance) or when a business only has one or two salaried employee on the payroll – but they still need to record payroll costs in QuickBooks for accurate job costing.

Whatever reason a business has for not purchasing a QuickBooks Payroll subscription – sometimes they just need to be able to record actual paycheck transactions in QuickBooks manually.

Below are the steps that you need to follow in order to turn on the QuickBooks Manual Payroll function and assumes that you have never processed payroll in your QuickBooks file before. Please follow these steps carefully (it’s sort of like going on a hunt for buried treasure) and make sure that you read each of the help topics that are displayed:

• Make sure that payroll is turned on in your Preferences. From the Edit menu -> choose Preferences -> scroll to Payroll & Employees -> click on the Company Preferences tab. Select the Full Payroll option.

• Next go to the Help menu -> choose QuickBooks Help. In the Search box, type in manual payroll. Once the search results appears in the window, click on the topic with the title “Calculate payroll taxes manually (without a subscription to QuickBooks payroll)”.

When this help topic displays, scroll down until you find the section titled “Set your company file to use the manual payroll calculations setting” and click on the link manual payroll calculations.

This opens another Help window. Here you will want to look for the title heading “If you are sure you want to manually calculate your payroll taxes in QuickBooks” and click on the link that says “Set my company file to use manual calculations.”