Retroactive Salary

Hello LindseyAllian,

I appreciate that you've shared which version of Payroll you're using in QuickBooks Online! For these kinds of situations, it's an important part of finding the right solution for your books. I bet your employee is excited about their salary increase and I'm here to help you get this taken care of.

The first thing you'll want to do is calculate how much the employee will be receiving for the retroactive amount owed to them. You'll need this number to input into the pay run after.

The next two items can be taken care of at the same time and I'll outline the steps below. What I'll walk you through is updating the salary amount for the employee and adding what's called an Other earnings item in order to account for the retroactive amount. Follow these steps.

1. Select Employees from the left menu.
2. Click the employee name.
3. Choose Edit employee.
4. Find the How much do you pay employee? section and click the pencil icon to edit it.
5. Update the Salary amount to the new amount.
6. Scroll to Other earnings in the You can also pay employee section.
7. Click Add other earnings type.
8. Name the earning type.
9. Leave the dollar amount at $0.00 (this will allow you to fill in the number you want during the pay run).
10. Click Done.
11. Click Done again to exit the employee setup.

There are a few ways to approach paying the employee the retroactive amount, so it's up to you to go with which is best for your situation. You could pay the retroactive amount in its own off-cycle pay run or you can include it with a future pay run (or spread over multiple future pay runs). Here's how you'd do it if you want to have it as its own pay run.

1. Select Run payroll.
2. Choose which Pay schedule the employee is on (Note: You'll only see this page if you have more than one pay schedule for your employees).
3. Make sure only the needed employee is selected.
4. Click the dollar figure in the Salary field.
5. Choose Skip salary this time only, then Apply.
6. Enter the dollar amount owed in the field you set up for the retroactive amount (Note: The field appears as another column in this section).
7. Continue with the payroll process as usual.

If you'd like a hand with that or to go over other options, don't be afraid to get in touch with QuickBooks Online support outside of Community. An agent will be happy to make sure your setup is good to go for what you need.

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Have a great weekend!