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K
Kitkat2
December 22, 2023
Question

Net Zero Paycheck in Quickbooks online for 401(k) employee

  • December 22, 2023
  • 1 reply
  • 0 views

I can't seem to make an additional paycheck which would be net zero.

 

When in QB Desktop, I could make an employee salary deferral of $10,000 to 401(k) employee, and then to offset would make a distribution to that employee, for a net zero paycheck.

 

How can I create this in QB Online?  They don't give you options to run additional paychecks that are zero.  This is a salary deferral for 401(k) to reduce the salary for the year.  Can anyone help?

1 reply

J
Jelayca V
December 22, 2023

Hi there, Kitkat2! I'm here to help you set up a zero net paycheck in QuickBooks Online (QBO). 

 

To create an additional paycheck with a net zero amount, please follow these steps: 

 

1. Add an Other Earnings pay type to the employee's profile.

  • Set the amount to 0 or leave the $ field blank.
  • Rename it as Taxable offset. Or create your own name.

2. Set up a retirement plan deductions. Set the deduction amount to zero.

3. Use the Gross up formula to determine the gross pay amount.

4. Go to Payroll, then Employees  and select Run payroll.

5. Choose an employee and pay period.

6. Zero out the employee's regular pay or salary:

  • Enter 0 for regular pay hours.
  • Select the salary amount. Select Skip salary this time only then Apply.

7. Select the Taxable offset box, enter the amount determined by using the gross up formula. Make sure that the other pay types are 0.

8. Select Actions ⋮ then Edit paycheck.

9. In the Employee taxes section, you can zero out Federal Income Tax and State Income Tax. (Optional)

10. In the Employee deductions section, enter the retirement plan amount.

11. Adjust the Taxable offset amount as needed to get the 0.00 net pay amount.

12. Once the net pay is zero, hit Save.

13. Select Preview payroll, then Submit payroll and hit Close.

 

For more details and information on creating a zero net paycheck, please refer to this article: Create a zero net paycheck

 

Also, we have some helpful articles that might be useful to you in the future: Set up or change a retirement plan

 

If you have further questions about zero paychecks in QBO or need assistance with other QBO features, please let me know by replying below. I'll be of help. Have a good one. 

K
Kitkat2Author
December 23, 2023

Yes, I have tried this prior to my posting, and I'm having several issues with this.

 

I have the Taxable Offset set at $0.  I have the 401(k) Employee contribution set at $0.

When I select the employee and zero out the salary to Skip Salary at this time, I go to edit the check and it says to enter hours or pay info and gives me no other option.

 

If I enter the Taxable Offset amount as $100, I can edit the check, but it does not allow  me edit the 401(k) employee contribution.

 

If I enter the 401(k) Employee contribution, then run payroll, I then remove the salary and enter the Taxable Offset, and when I hit Preview Payroll, I am unable to edit and get a Red Box Saying Net Pay must be greater than 0.

 

None of these options allow me to edit a check or run a 0 net check.

K
Kitkat2Author
December 23, 2023

The other issue with this is that this is a SALARY DEFERRAL for the 401(k) contribution, meaning no taxes should be paid.  The  Gross Up doesn't make sense since then you would be paying taxes on something that is actually a salary deferral.

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