What are the Different Tiers of QBO Payroll? | Understanding How Does Payroll Work in QuickBooks Online

What are the Different Tiers of QBO Payroll? | Understanding How Does Payroll Work in QuickBooks Online

QuickBooks Online, a leading accounting software, (and the ONLY accounting software we use and support at NetDeposited), provides a comprehensive payroll module that simplifies how small businesses manage pay schedules, employee benefits, and payroll taxes. This article explores how payroll operates within the QuickBooks Online, and the various tiers of QuickBooks Online (QBO) payroll services, offering insights into choosing the right payroll service for your business needs.

Discover how payroll functions within QuickBooks, including its different service tiers like QuickBooks Online Payroll Core, Premium, and Elite. Learn about submitting payroll, tax compliance, payroll history and the benefits of using this payroll software.

How Does Payroll Work in QuickBooks Online?

QuickBooks Payroll: An Overview QuickBooks integrates payroll seamlessly into its platform, ensuring users can manage payroll alongside other financial aspects of their business. This integration helps streamline payroll processes, making it efficient to run payroll, pay employees, and manage payroll taxes.

Setting Up Payroll in QuickBooks

Initial Setup and Employee Information Setting up your payroll in QuickBooks involves entering detailed employee information, including hire dates, pay rate, and tax status per month. QuickBooks also allows the addition of benefits and deductions specific to each employee.

Payroll Schedule and Pay Cycles

Managing Pay Schedules Efficiently QuickBooks users can set up multiple pay schedules, accommodating various employee types such as salaried employees or hourly workers, and ensuring compliance with pay frequency laws.

Running Payroll in QuickBooks

The Steps to Process Payroll The process to run payroll in QuickBooks is straightforward. Users enter hours worked, review payroll details, submit payroll and approve for payment. QuickBooks automates calculations, ensuring accuracy in wages and deductions.

Direct Deposit and Pay Stubs

Streamlining Employee Payments QuickBooks supports direct deposit hourly employees, enabling businesses to deposit wages directly into employee bank accounts, which is both time-efficient and secure. Employees can access their pay stubs through QuickBooks Workforce, enhancing transparency.

What are the Different Tiers of QBO Payroll?

QuickBooks offers three primary payroll service tiers, each designed to cater to different business needs, from small startups to large enterprises requiring extensive payroll and HR support. Here’s a deeper look into each tier and what it offers:

QuickBooks Payroll Core

Fundamentals of Payroll Processing QuickBooks Payroll Core is the entry-level tier more quickbooks payroll here, ideal for small businesses seeking to automate their payroll processes without the complexities of advanced HR tools. This tier includes:

  • Full Payroll Processing: Automate payroll runs with confidence that each step—from calculating paychecks to deducting benefits and garnishments—is handled accurately.
  • Automatic Tax Calculations: The system calculates federal and state payroll taxes automatically, reducing the manual workload and helping to minimize errors.
  • Payment Method Flexibility: Employers can set up payment via direct deposit or check, providing flexibility to meet the preferences of different employees.
  • Basic Reporting Capabilities: Access essential payroll reports that can help you track payroll costs, taxes paid, and other critical financial metrics.

QuickBooks Payroll Premium

Enhanced Features for Growing Businesses Designed for businesses that are expanding and need additional payroll and HR support, QuickBooks Payroll Premium includes everything in Core, plus:

  • Same-Day Direct Deposit: Offer employees quicker access to their earnings with the convenience of same-day direct deposit.
  • Expert Setup Review: Get peace of mind with expert oversight. A QuickBooks professional will review your payroll setup to ensure everything is correct before you run your first payroll.
  • HR Support Center: Gain access to a comprehensive resource for HR-related information, including customizable templates for HR documents, employee handbooks, and up-to-date compliance information.
  • Advanced Reporting: Generate detailed reports for a deeper analysis of payroll expenses, tax liabilities, and even to track patterns over time.

QuickBooks Payroll Elite

Top-Tier Services for Maximum Support The Elite tier is the most comprehensive offering, perfect for businesses that need a full spectrum of payroll and HR services along payroll processed with expert assistance:

  • Personalized HR Advising: Receive direct access to certified HR advisors who can provide tailored guidance on complex HR issues, helping to ensure compliance and improve employee management practices.
  • 24/7 Expert Support: With around-the-clock access to payroll experts, you can get help whenever you need it, ensuring that payroll issues can be resolved quickly, regardless of when they arise.
  • Tax Penalty Protection: QuickBooks will take responsibility for any payroll tax filing errors, including paying any penalty fees, which significantly reduces the risk for businesses.
  • Robust Analytics and Insights: Utilize advanced analytics tools to gain insights into labor costs, forecast payroll expenses, and better manage budgeting for HR costs.

Each of these tiers is designed to provide a scalable solution that grows with your business, ensuring that as your needs evolve, your payroll system keeps pace, providing the necessary tools and features to handle your company’s payroll effectively and efficiently. Whether you're just starting out or managing a complex organization with varied payroll needs, QuickBooks Payroll offers a tier that can meet your requirements, providing both basic payroll functions and advanced HR support tailored to your business’s growth and success.

Advanced Payroll Features in QuickBooks Online

QuickBooks payroll services offer a comprehensive set of features designed to streamline complex payroll tasks, ensure compliance with tax regulations, manage employee benefits efficiently, and provide detailed financial insights. Here's a deeper dive into these advanced capabilities:

Tax Compliance and Filings

Automated Tax Calculations and Submissions QuickBooks significantly simplifies the intricate task of payroll tax management. It automatically calculates federal, state, and local taxes, ensuring that deductions from employee paychecks are accurate. This automation extends to the preparation and submission of tax forms such as W-2s and 1099s, which QuickBooks files on behalf of the business. By automating these tasks, QuickBooks helps businesses minimize the risk of errors that can lead to tax penalties and ensures compliance with ongoing changes in tax laws and regulations.

Employee Benefits Management

Integrating Health and Retirement Plans Managing employee benefits is a critical aspect of payroll and HR that can be complex and time-consuming. QuickBooks integrates tools for managing various benefits such as health insurance, dental plans, and retirement plans like 401(k)s. This integration allows employers to easily add and manage these benefits directly within their payroll setup, ensuring deductions are correctly calculated and managed each pay period. This not only helps in providing more attractive employee benefits packages but also ensures compliance with relevant laws and regulations regarding employee benefits.

Reporting and Analytics

Insights from Payroll Reports QuickBooks provides a range of automatic payroll reporting features that allow businesses to understand and analyze their payroll expenses deeply. These reports include detailed breakdowns of payroll by department, cost center, or individual employee, as well as comprehensive tax summaries and historical payroll data. Such reporting capabilities are crucial for financial planning and audits, helping businesses monitor payroll-related expenditures and make informed decisions based on accurate payroll data.

Integration with Other QuickBooks Services

Seamless Integration with QuickBooks Online One of the strengths of QuickBooks Payroll is its seamless integration with QuickBooks Online, the cloud-based accounting software. This integration means that payroll data is automatically synced with financial accounting data, eliminating the need for duplicate data entry and reducing the potential for errors. For instance, payroll expenses automatically update in the general ledger and financial statements, providing real-time financial visibility.

QuickBooks Time for Time Tracking QuickBooks Time (formerly TSheets) is a time tracking solution that integrates directly with QuickBooks Payroll. This feature allows employees to clock in and out through multiple devices, and their time logs are directly linked to the payroll system. This integration ensures that payroll calculations are based on accurate, real-time data on employee hours worked, facilitating accurate payroll processing and compliance with labor laws regarding overtime and breaks.

These advanced features underscore QuickBooks' commitment to providing a robust, integrated payroll and health benefits solution that not only simplifies payroll processes but also enhances overall business efficiency and compliance. Whether a small business owner or an HR professional in a larger corporation, QuickBooks payroll services offer powerful tools to manage payroll and employee benefits effectively.


QuickBooks Payroll offers a robust solution for managing payroll, ensuring compliance file taxes, and providing employee benefits efficiently. Whether you choose the Core, Premium, or Elite tier, QuickBooks simplifies payroll tasks, allowing business owners to focus more on growing their business.

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