Easily Add QuickBooks Payroll Retroactive Pay to Checks
QuickBooks Payroll subscriptions are designed for smooth handling of the payroll or payroll tax responsibilities. The different payroll packages are featured according to the requirements of the industry. Basic payroll, Enhanced payroll, and Full-Service payroll are three payroll services offered by Intuit. They vary in cost and price range. It is an easy-to-use software that allows the user plenty of benefits along with adding retroactive pay to checks.
When there is a hike in the pay of an employee and if it is not notified to the payroll department owed back pay, with QuickBooks you can add the retroactive pay to a current payroll payment. You can do the same to create a bonus payroll item named Retroactive Pay and further add that item to the amount owed to the paycheck of the employee.
As the payment is issued to the employee for a past pay period, you can generate a bonus check in QuickBooks. With the help of the bonus check you can add the same deductions that you might add to a regular paycheck and the employee payment and the earnings dropped out using an unscheduled payroll.
The payment is managed through the retroactive pay item that must be set up before making payment to the employee. The retroactive pay item performs exactly like a regular bonus item that you can easily add to the check of the employee.
Create Retroactive Pay Item
- Go to Lists -> select Payroll Item List.
- Select Payroll Item -> choose New.
- Choose Custom Setup -> choose Next.
- Choose Wage then Click Next.
- Select Bonus -> choose Next.
- Enter Retroactive Pay for the item name -> Next.
- Choose the account needed to track the retroactive pay.
- Click Finish.
Add Retroactive Pay to Checks
- Go to Employees -> select Pay Employees -> choose Unscheduled Payroll.
- Choose specific employees by checking the checkmark field. Also, you can select all employees through Check All button.
- Delete the earnings of the specific employee by deleting the values of the fields comprising of the number entered.
- Approach the Earnings section by choosing the name of the employee.
- Select below the paycheck of the employee -> Choose Retroactive Pay.
- Type the total for the retroactive pay in the Rate column.
- Approach the Employee Summary section.
- Choose the Amount column in the Federal Withholding or State Withholding row, and delete the current values.
- Enter the retroactive pay amount -> enter the “*” key.
- Mention the federal tax or state tax rate percentage into the appropriate “Federal Withholding” and “State Withholding” fields.
- Choose the “=” key on your computer keyboard to calculate the State or Federal tax.
- Select Open Paycheck Detail. You can see the checks you created by clicking Save & Next until you have viewed all selected paychecks.
- Verify the Enter Net/Calculate Gross box to pay the entire amount to the employee -> select Save & Close.
- Choose Continue. Click Create Paychecks once done.
- Click Print Paychecks, Print Pay Stubs, or both options to print both a paycheck and a pay stub.
- Then choose to Send Payroll in case you choose Direct Deposit [QuickBooks Payroll Direct Deposit] or an Intuit Payroll service.
Get Help For QuickBooks Payroll Retroactive Pay
Is retro pay equivalent to back pay?
Retro pay or retroactive pay is the compensation you owe an employee for work performed during a past pay period. Back pay is the point at which you owe worker wages you didn’t pay by any stretch of the imagination, though retro pay is the point at which you paid a representative not as much as what you ought to have.
How would I be able to calculate the QuickBooks payroll retroactive pay for salaried employees?
First of all, you have located the employees’ original yearly salary and the newly updated salary. Then you have to check the number of pay periods. Now, you have to divide the employee’s earlier yearly salary via the number of pay periods. The next thing is to divide the employee’s newer yearly salary just via the number of pay periods and then subtract the total.
How would I be able to calculate the retro pay?
To calculate the annual retro wages, you have to multiply the specific hours that you paid at the earlier rate by the difference between the earlier and the new rates. The new rate might be effective at the beginning of the earlier biweekly pay period in which employees worked and were paid for just 80 hours.