Setting up employees in QuickBooks Advanced Payroll and Bureau Payroll
How to add an employee in QuickBooks Online Advanced Payroll or Bureau Payroll, with the RTI hours bands, tax code rules and payment steps explained.
Adding an employee in QuickBooks Online Advanced Payroll or Bureau Payroll is a four-part form, and the two products share the same flow. Most of the difficulty hides in three places: the hours band reported to HMRC, the format of the tax code, and the payment step. Each carries a rule that is easy to miss. We have broken the flow down, screen by screen.
Gather the details first
The form runs through four screens: basic details, employment details, banking, then tax and National Insurance. Before you begin, collect the employee’s name, address and National Insurance number. Keep the start date, job title and salary to hand as well. To open the form, go to the All apps menu, select Payroll, then Employees, and choose Add employee.
Screen one: personal details and self-service
The first screen collects personal and contact details. It also carries an optional self-service switch. Enable it and the employee can see their own payslips and update their own details, which cuts down routine queries to the payroll team. Select Next to continue.
Screen two: employment details
Here you set the start date, gender and primary location, then pick a pay schedule. The pay rate can be expressed per annum, per day or per hour. You also define regular weekly hours, assign a pay category, and choose whether a leave allowance template applies. Timesheets can be switched on here too.
One option on this screen matters more than it looks. The regular hours count beyond pay, because HMRC reporting asks how many hours an employee regularly works. Marking an employee as paid irregularly changes that reporting entirely, which brings us to the bands themselves.
Which hours band goes to HMRC?
RTI reporting to HMRC includes a letter stating how many hours an employee regularly works. The bands run from A to E. A means fewer than 16 hours. B covers 16 to 23.99 hours, C covers 24 to 29.99 hours, and D means 30 or more.
E works differently. It tells HMRC that the employee is not paid regularly. Tick the irregular-pay option on screen two and the submission reports E regardless of the hours actually worked. Use it only where it genuinely applies.
Banking: three ways to record payment
The third screen asks how the employee gets paid, with three account types on offer. Electronic includes the employee in the payment files the software produces. Manual records the account for your files but processes nothing electronically. Cash/Cheque records no bank details at all. Pick Electronic if you plan to pay through a downloaded payment file.
A finished pay run pays nobody
This is the caveat that catches new users out. Pay runs in this product do not pay anyone automatically. Paying the team stays your responsibility, either by manual payment or by downloading a payment file and uploading it to your internet banking provider. The software calculates and records; the money moves only when you move it.
Tax and NI on the final screen
The last screen covers tax and National Insurance. Enter a payroll ID if the employee has been reported to HMRC before, since it links the record to earlier submissions. Indicate whether IR35 rules apply, and select student or postgraduate loans where relevant. The National Insurance number and category go here too. If the number is not yet known, flag it as unknown rather than guessing.
Why does the tax code drop its X?
Tax codes need careful typing. Do not include the X that sometimes ends a code: K325X goes in as K325. That letter is not part of the code itself. It signals the week one or month one calculation method, where each pay period is taxed in isolation. To use that method, tick the week one/month one box on the same screen. Leave the box unticked and the code defaults to cumulative.
A notification feature handles code changes for you. It applies updated tax codes automatically, so new codes do not need to be retyped by hand.
The short version
Four screens, three trip hazards. Check the hours band before you save, strip the X from any week one or month one code, and remember that no pay run moves money on its own. Once staff are in, the same employees area carries the rest of the lifecycle, from bulk imports to leavers.