by Sunburst Software Solutions, Inc.
Archives by Month

How To Turn On and Use Manual Payroll in QuickBooks

Print Friendly, PDF & Email

We are a small company and are looking at various options for payroll; Ask the Expert - QuestionI’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.


Ask the Expert - AnswerHow 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.

Full Payroll

  • 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)”.

QuickBooks Help - search manual 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.

Set up your company file

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.”

Use manual payroll calculations

Once you click this link, you should see the following QuickBooks information window.  This is the ONLY notification that you will receive indicating that manual payroll is now active in your QuickBooks file.

manual payroll on

  • If you go to the Lists menu and choose Payroll Item List, you’ll see that QuickBooks has set up some of the more basic payroll tax items for you – you’ll need to enter the rest of them yourself.

basic payroll tax items

  • At this point I would highly recommend that you go through the Payroll Setup Wizard – found from the Employees menu -> and choosing Payroll Setup.  The Payroll Setup wizard walks you through seven (7) key pieces of payroll data.  Follow the on-screen prompts to complete the setup.
  • Set up Time tracking.  If you wish to enter employee time against various jobs or projects and want that time (as well as wages) to appear in your job costing reports, you’ll need/want to enable time tracking.  From the Edit menu -> choose Preferences -> scroll down to Time & Expenses -> click on the Company Preferences tab -> check/select the Yes option for Do you track time and set the first day of your work week.

More articles on timetracking, job costing, and weekly timesheets:


If you have had a QuickBooks payroll subscription and wish to cancel it – you would still run through the steps to setup/activate the manual payroll options by going through the Help menu.  All of your current payroll items would still exist in your Payroll Item list and you would enter employee hours and then create paychecks as you always have – the only difference is that you would need to enter the correct amount of payroll tax withholdings.  You will have to contact Intuit and cancel your current payroll subscription.

There is no way to “enter” payroll tax table information in QuickBooks, so each week when you create the manual paychecks you’ll need to manually enter the taxes using information provided by your outside payroll service, paper tax tables, or from the use of a free paycheck calculator.

I hope you find this article to be helpful, if so, please take a moment to leave a comment or share it on your favorite social media network.

17 Responses to How To Turn On and Use Manual Payroll in QuickBooks

About Your Host:

Nancy Smyth, Certified QuickBooks ProAdvisor

Nancy Smyth, Sunburst Software Solutions, Inc.
QuickBooks Construction & Payroll Expert

I've been using and supporting QuickBooks products since the early 1990's. I've worked with thousands of contractors, assisting them with QuickBooks setup, Certified Payroll Reporting requirements, AIA Billing and Weighted-Average Overtime.

QuickBooks is a powerful product, but learning how to use it in your construction business can be difficult. I hope you find resources available here to be helpful.

Top QuickBooks blogs to read in 2018
We've been selected by TSheets as a Top QuickBooks blog to read in 2018!
Stay updated!

Sign up to receive our latest QuickBooks Tips, Tricks & News via email:

Enter your email address:

Delivered by FeedBurner

We promise NOT to sell, rent, or otherwise distribute your name and email address!

FREE 30-Day Trials

Request FREE 30-day Trials of QuickBooks add-ons for Certified Payroll, AIA Billing & Payroll Wage Management. Save time and increase accuracy on time-consuming error prone tasks; so you get paid on time!

Free 30 day trials of QuickBooks integrated add-ons for certified payroll, aia billing and weighted-average overtime

Certified Payroll Training:
Learn how to complete a Certified Payroll (Prevailing Wage) Report and fulfill your reporting requirements - 2 hour recorded webinar - $99.99. Click here for more info.

certified payroll requirements webinar
QuickBooks Training

Frustrated with QuickBooks?

QuickBooks Premier ContractorLearn how to get the MAXIMUM possible results from QuickBooks in your construction business! Visit our new QuickBooks training website, Learn to use QuickBooks in your construction business.

QuickBooks Time Tracking

Save 10%/FREE 14-day trial!

QuickBooks Time Tracker