Final Paycheck can be used for the employees that are no longer a part of your company or business. As your employees leave, you prepare a final paycheck in order to cover the remaining wages. If you are finding it difficult, we will help you to understand how to run a final paycheck in QuickBooks Online.
Please note that final paychecks for terminated employees can be created in QuickBooks Desktop Payroll and Intuit Online Payroll as well. However, the guide is focused on an online version of your QuickBooks accounting system.
How to Issue QuickBooks Final Paycheck?
Employees can leave the company or you may terminate them for any valid reason such as layoff, resignation, discharge, and others. Whatever the reason is, it is the responsibility of most businesses to generate a final paycheck to cover the remaining wages of a particular employee. In addition, you may need to comply with federal or state tax laws.
To run the QuickBooks final paycheck, one has to create the final paycheck. Now, this can be done in two different ways; Unscheduled Payroll and Scheduled Payroll. Let’s understand how to create a final paycheck in QuickBooks Online for both Scheduled Payroll and Unscheduled Payroll.
Create Unscheduled Final Paycheck in QuickBooks Online Payroll
If your payroll is unscheduled then you will have to enter the details manually for pay type, paying amount for employee, and other paycheck calculations. Then, you can select the bank account, employee, and payment method. After reviewing the details, you can submit your payroll for the employee. Let’s have a look at the detailed steps and learn how to create a final paycheck in QuickBooks Online:
- Navigate to the “Payroll” menu.
- Then, click on the “Employees” tab.
- Now, use the dropdown and then select one of the following options. Please note that you are required to select any of the following only if you have marked them as a pay type:
- Bonus only
- Commission only
- Fringe benefits
- Once done, choose the “As net pay” option if you are aware of the exact amount that you have to pay to your employee. In case you have no clue about the exact amount then select the “As gross pay” option.
- Here, you can add additional details regarding tax and paycheck calculations.
- After that, click on your bank account that you use to track such a type of payroll transaction in QuickBooks. Make sure that you check the payment date and pay period as well.
- At this point, you need to pick an employee for whom you are paying the final check.
- Thereafter, you can enter the compensation, memos, employee hours, and any other important information for a paycheck.
- Now, go to the “Pay Method”, click on the link to select a direct deposit paycheck or paper for each employee.
- Then, click on the “Preview payroll” option.
- Once done, click on the “Preview payroll details” to verify the information you have entered for the paycheck.
- You can now select the “Submit payroll” option. If you want to just save this paycheck but will send later then click on the “Save for later” option.
- To complete the steps, you can click on the “Finish Payroll” button.
Now that you have created the final paycheck for the selected employee, you can continue updating the employee status.
Update the Employee Status for QuickBooks Online Final Paycheck
By updating the employee status, you can remove the employee from the active list of employees so that you don’t need to bill this particular employee in the future. To update the status of your employee, you can do the following:
- In “QuickBooks Online Payroll”, click on the “Payroll” or “Workers” menu.
- Then, click on the “Employees” tab.
- Here, choose the name of your employee for whom you want to update the status. In case the employee is not on the list then click on the “all Employees” option using the “active Employees” drop-down option.
- Now, click on the “Edit” button located next to the “Employment”. In case you find the “Employment” tab then you need to verify if you have any paychecks created in the payroll account. Here, you should at least have one paycheck generated so that you can successfully change the employee details.
- Click on the “Terminated” option using the “Status” drop-down menu. You can also go with other statuses such as:
- Unpaid Leave of Absence
- Paid Leave of Absence
- Now, you can click on the “Not On Payroll” if you furlough or lay off the employee.
- Click the “Done” button to finish the steps.
This is how you can create the unscheduled final paycheck in QuickBooks Online Payroll once the employee is terminated. Remember that you should change the employee status once you successfully run the final paycheck for them.
Create Scheduled Final Paycheck in QuickBooks Online Payroll
If the scheduled paycheck is already created then you just have to select it and proceed with other steps. For instance, you just need to select the bank, employee name, paying method, and then preview the payroll information before submitting the paycheck. Learn how to create a final paycheck in QuickBooks Online in detail:
- Click on the “Payroll” menu.
- Then, go to the “Employees” tab.
- Now, move to the “Run Payroll” option.
- If you are having any payroll schedule then you need to select it and click the “Continue” button.
- Now, click on the bank account that you want to use to track the payroll transaction in QuickBooks. In addition, you have to check the payment date and pay period.
- Now, you can select an employee whom you want to pay the final check.
- Then, enter the compensation, memos, employee hours, and any other important information for a paycheck.
- Once done, move to the “Pay Method” option and click on the link to select a direct deposit(Change Direct Deposit Bank Account in QuickBooks) paycheck or paper for each employee.
- Here, you can press the “Preview payroll” option.
- After that, click on the “Preview payroll details” to review the information you have entered for the paycheck.
- Select the “Submit payroll” option. In case you wish to just save this paycheck but will send later then click on the “Save for later” option.
- To complete the procedure, click on the “Finish Payroll” button.
Now, you have learned how to run a final paycheck in QuickBooks Online. When you are done submitting the scheduled final paycheck for the selected employee in QuickBooks Online Payroll, you can update the status of the same employee. For changing the status for QuickBooks Online final paycheck, we have already shared the steps above.
To Wind Up
During the termination of an employee, final paychecks are usually sent to the employee by the employer. To run the final paychecks, first, you will have to create the final check to cover all the remaining wages and then process it in QuickBooks Online Payroll. The final paychecks can be generated for scheduled and unscheduled payroll. This should be noted that after submitting the final paycheck for the terminated employee, you need to update the employee’s status by removing them from the employee list to avoid future payments.
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