How to Track Paid Leave and Sick Time for the Coronavirus in QuickBooks

Track leave and sick time for the coronavirus in QuickBooks

Learn how to pay your employees paid leave or sick time if they’ve been affected by COVID-19 with QuickBooks Desktop Payroll.With QuickBooks Desktop Payroll, you can ensure your employees have the money they need, and you comply with the Family First Coronavirus Response Act (FFCRA). In this blog we are explaining how to track paid leave and sick time in QuickBooks.

Fellow the Below Steps to Track Leave and Sick Time in QuickBooks:

Before you can pay your employees, you need to do a few things. Here’s what to do.

Step 1: Determine your employee’s benefit and hourly rate:

Before you can give your employees this sick leave, you first need to figure out what pay leave type they fall under and their hourly rate.

Benefit type-

Under the FFCRA, there are three different types of paid leave. Employers can also geta credit for any health insurance premiums they pay for impacted employees while they are on leave.

  • National Paid Leave Employee: Your worker is ill and beneath quarantine with COVID-19.
  • National Paid Leave Family: Your employee is looking after a member of the family who’s sick or impacted with COVID-19.
  • The National Paid Leave FMLA: Your worker is taking depart beneath the Family Medical Leave Act (FMLA) to care for youngsters underneath 18 whose school or infant care is closed due to COVID-19.
  • National Paid Leave – Health Credits: If you are contributing to an employee’s medical insurance in the course of the time they’re being paid beneath the FFCRA provisions, you can song this quantity and a credit can be applied for your federal tax liability.

Hourly fee:

In most cases, you may pay your worker the hourly fee you have paid them over the past 6 months. However, there are a few exceptions that correspond with the Regular Rate of Pay Under the Fair Labor Standards Act (FLSA).

  • Employees on fee: You need to create an hourly fee for them. Their hourly price below the FFCRA desires to be equal to the fee paid over the last 6 months divided by way of their hours worked within the 6-month period.
  • Tipped Employees: You’ll need to make sure you encompass your personnel tipped income when entering their paid depart or FMLA growth pay. Review the amount of income they received over the last six months. Then common it out over the range of hours they worked inside the identical period. You’ll need to exchange the worker’s pay charge during this time and make certain you’re paying them at the least minimum wage required under the FLSA, your state, or local jurisdiction.

Step 2: Set up your expense accounts for the paid leave:

Once you know what type of paid leave type is applicable to your employee’s situation, setting up this account will help track the eligible wages to use towards tax credits later on.

  • Go to the Lists menu, then pick Chart of Accounts.
  • Select the Account ▼ drop down, then select New.
  • Choose Expense, then select Continue.
  • From the Account Type drop down, select Other Expense.
  • Give your price account a name, which include COVID-19 Expenses, in the Name field, fill out all the relevant information, and pick Save and Close.

Step 3: Set up payroll items:

Once you set up your liability and expense accounts, you need to set up payroll items to track each type of paid leave found under the FFCRA that you identified in step 1.

National Paid Leave Employee and National Paid Leave Family –

  • Go to the Employees menu, then Manage Payroll Items, then choose New Payroll Item.
  • Select Custom Setup, then select Next.
  • Select Addition (Employee Loan, Mileage Reimbursement), then select Next.
  • Give your pay type a name, along with National Paid Leave EE or National Paid Leave Family, then choose Next.
  • In the Expense account window, pick COVID-19 Expenses (or anything you named the rate account) and then select Next.
  • In the Tax tracking kind window, pick out the paid leave type, such as National Paid Leave EE or National Paid Leave Family based on what you are putting in because the tax tracking kind.
  • Taxes window, pick Next.
  • In the Calculate Based on Quantity window, pick Calculate this item based on Quantity, and then choose Next.
  • In the Default Rate and Limit window, set the charge for the following items: The National Paid Leave Employee restriction is $5110 and the National Paid Leave Family is $2000.
  • Ensure the Limit Type is Annual, restart each year, and then choose Finish.

National Paid Leave FMLA:

  • Go to the Employees menu, then Manage Payroll Items, then select New Payroll Item.
  • Select Custom Setup, then select Next.
  • Select Addition, then select Next.
  • Give your pay type a name, such as National Paid Leave FMLA, in the text field and select Next.
  • Select COVID-19 Expenses (or whatever you named the expense account) as the expense account, and then Next.
  • In the Tax Tracking type window, Select National Paid Leave FMLA, then Next.
  • In the Taxes window, select Next.
  • Calculate Based on Quantity window, select Neither, and then select Next.
  • In the Default Rate and Limit window, make sure the rate is at 0 and the limit is at $10,000, select One Time Limit from the Limit Type drop down, and select Finish.

National Paid Leave – Health Premium:

  • Go to the Employees menu, then Manage Payroll Items, then select New Payroll Item.
  • Select Custom Setup, then pick Next.
  • Select Company Contribution, then pick Next.
  • Give your organization contribution a name, which include National Paid Leave – Health credits, and select Next.
  • On the Agency for enterprise-paid legal responsibility screen, pick out COVID-19 Expenses from the Liability account drop down, and choose COVID-19 Expenses (or some thing you named the rate account) from the Expense account drop down, and then pick out Next.
  • On the pop-up message to confirm you selected the same account, choose Yes. Selecting the identical account for Liability and Expense ensures your liabilities aren’t overstated.
  • The Tax tracking type window, pick National Paid Leave- Health, then choose Next.
  • On the Taxes window, pick Next.

National Paid Leave & Medicare Credit:

  • Go to the Employees menu, then Manage Payroll Items, then pick New Payroll Item.
  • Select Custom Setup, then pick Next.
  • Select Company Contribution, then select Next.
  • Give your company contribution a name, inclusive of National Paid Leave – Medicare, and pick out Next.
  • On the Agency for business enterprise-paid legal responsibility screen, choose COVID-19 Expenses from the Liability account drop down, and pick COVID-19 Expenses (or anything you named the cost account) from the Expense account drop down, and pick out Next.
  • On the pop message to affirm you selected the equal account, pick Yes.
  • The Tax tracking type window, choose National Paid Leave- Medicare, then select Next.
  • On the Taxes window, select Next.
  • On the Default fee and limit window, ensure the rate is at 0.00 after which the restriction 0, and pick Annual, restart every yr from the Limit Type drop down, pick out Finish.

Step 4: Set up a new tax item:

Once you’ve set up your payroll items, you’ll need to set up tax items to ensure you’re tracking the tax credits. These steps are the same for all QuickBooks Desktop Payroll versions.

  • Go to the Employees menu, then Manage Payroll Items, then pick New Payroll Item.
  • Select Custom Setup, then pick Next.
  • On the Payroll item type window, select Other Tax, then pick out Next.
  • On the Other tax window, pick out National Paid Leave Credit, after which Next.
  • In the Name utilized in paychecks and payroll report window, enter National Paid Leave Credit inside the text field, then select Next.
  • In the Agency for company-paid liability window, select the corporation you pay taxes too from the drop down, select Covid 19-Expenses within the Liability account drop down, and pick Payroll Expenses in the Expense account drop down, after which pick Next.
  • From the Taxable Compensation Window, select Finish.

Our Support:

In any case, if you face any trouble with any solution or with any single step, feel free to contact the customer support team via QuickBooks customer support helpline number +1-800-916-4623. To know more about how to track paid leave and sick time in QuickBooks for corona virus or any query in your mind regarding this error or do QUICKBOOKS LIVE CHAT with our IT professionals

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