Managing employees in QuickBooks Online Advanced and Bureau Payroll

Administrators working in QuickBooks Online Advanced Payroll or Bureau Payroll have been asking for one clear path through an employee record, from the first hire to the last pay run. The accepted answer in the Intuit community lays out the full flow. We have condensed it here around the decisions that actually matter on screen.

Where the employee record starts

The answer assumes you are already signed in to the payroll product, not the standard QuickBooks Online company file. From the main menu, open All apps, select Payroll, then choose Employees. On the Employees screen, select Add employee.

Before starting, the accepted answer recommends gathering two sets of details. Personal details are the employee’s name, address, and National Insurance number. Employment details are the start date, job title, salary, and any previous payroll identifier already reported to HMRC. Having those in front of you avoids pausing halfway through the setup.

The four setup steps for a new employee

The employee form is split into four stages. You cannot finish a new employee without completing all of them, so it helps to know what each stage expects.

Step 1: personal and contact details

The first stage asks for the employee’s personal information and contact details. It also offers self-service access. If you enable it, the employee can view payslips and update certain parts of their own record later. That setting is worth deciding early because it changes how much of the file the employee can see.

Step 2: employment details, hours, and RTI

The second stage covers the employment record. Enter the start date, gender, and primary location. Then choose a pay schedule and a pay rate. Rates can be set per year, per day, or per hour, so pick the one that matches the employment contract.

You also define regular weekly working hours here. When reports are sent through RTI, HMRC needs to know how many hours the employee normally works. QuickBooks uses a set of status letters for this, and the accepted answer explains each one:

• A means fewer than 16 hours a week
• B means 16 to 23.99 hours a week
• C means 24 to 29.99 hours a week
• D means 30 hours or more a week
• E covers employees who are not paid regularly

If you tick the option that says the employee is paid irregularly, QuickBooks submits E on the employee’s FPS regardless of the hours actually worked. Do not combine that tick with one of the hourly bands, or you will send conflicting information.

The same stage asks you to assign a pay category, choose a leave allowance template if you use one, and say whether timesheets apply. Each choice flows through to pay runs, so it is worth checking a live employee record against these fields if something later calculates incorrectly.

Step 3: banking details

The third stage asks how the employee should be paid. The three account types are:

• Electronic, which includes the employee in generated payment files
• Manual, where the payment is recorded but not processed electronically
• Cash or cheque, where no bank details are stored

There is an important limit in this stage. QuickBooks does not pay anyone automatically. The accepted answer is explicit that the employer or administrator must make the payment happen, either through a manual payment or by downloading a payment file and uploading it to internet banking. The payroll software can calculate and record the run, but it will not send money from your bank account.

Step 4: tax and National Insurance

The final stage is where most new employee setups need careful attention. If the employee has been reported to HMRC before, enter the existing payroll ID. Then confirm whether IR35 rules apply to the engagement.

Enter the tax code without the final X. The X at the end of a code is a marker that tells you to use the week one or month one calculation. In QuickBooks, you tick the W1 or M1 box when that basis applies instead of typing the X. If you leave the box unticked, the code is treated as cumulative.

The accepted answer also notes that QuickBooks can update an employee’s tax code automatically through its tax code notification feature. You can still enter a code manually, but the automatic update is intended to reduce missed changes from HMRC.

After the tax code, complete the student loan and postgraduate loan fields if they apply. Then enter the National Insurance number and choose the correct NI category. If the number is not known yet, tick the NINO unknown option so the record can be submitted while the number is being confirmed.

Importing several employees at once

For a larger team, entering employees one by one is slow. The accepted answer covers an import option on the Employees screen. The safer route is to download the template QuickBooks provides rather than build your own spreadsheet, because the column names and date formats must match what the system expects.

Complete one row per employee using the same detail groups described above, then upload the file and review any rows that fail validation. Fix those rows in the template and try again. An import is most useful when every new employee has the same pay schedule and pay category, because those common values travel across the whole file.

Terminating an employee

When someone leaves, the process starts from the employee’s record rather than from the pay run screen. Select the employee, choose the termination option, and enter the leaving date. QuickBooks then uses that date when it reports the leaving through RTI.

The record is not deleted. It stays on the Employees list with a terminated status, and the leaver disappears from the active view. A final pay run is still your responsibility. Any payments due after the leaving date should be processed in the normal payroll flow before the employment is closed off.

What the accepted answer does not do

The verified response is a workflow, not a guarantee that every calculation will be right. It tells you where the settings live and how QuickBooks reports them. The hours bands, the manual payment step, and the rule about the X in a tax code are the three details that tend to cause the most confusion in practice. Getting those right at the point of entry saves a much larger cleanup later.