Understanding QuickBooks Payroll Options – QB Services


Searching for QuickBooks Desktop Payroll…


It’s confusing. A search for QuickBooks Payroll results in QuickBooks Online Payroll, and the search for the desktop versions is tedious. There’s certainly a place for Online Payroll, but sometimes we want the desktop version, which doesn’t just integrate with your desktop QuickBooks, but is a part of it.

I found that searching for QuickBooks desktop payroll specifically would lead to webpages featuring an online product as part of the demo, whether or not the product was the desktop version. As a result, it’s sometimes difficult to tell if the options presented on Intuit’s websites are for QuickBooks Desktop or QuickBooks Online, which are markedly different products, if only because of their platforms. For example, the following is from Intuit’s website resulting from a search for QuickBooks Desktop Payroll:


This offering is for desktop payroll, even though the graphic displayed at the bottom of the page is quite clearly for Intuit Online Payroll. The CPA Practice Advisor article this links to is from 2011, but there haven’t been major changes to the desktop version in the past few years, so it has some good information about running payroll in QuickBooks Desktop. This is most notably the case for job costing, which is cumbersome in QuickBooks Online but works well in QuickBooks Desktop. The Intuit website hasn’t corrected the charge per Direct Deposit, with different web pages listing prices from $1.45 to $1.60 (it is now $1.75).

The Enhanced Desktop Payroll for Accountants lets you have up to 50 EINs on your account, and doesn’t have the $2.00 per check charge common to the other versions.

I did another Google search for QuickBooks Payroll and the following is what came up. It can be misleading if you think you’re getting QuickBooks Desktop payroll, because what you’re really getting is, in the first example, QuickBooks Online with payroll, and in the second two examples, you’re getting Intuit Online Payroll, not the desktop version.

There are only the two options listed here: Basic and Enhanced.

Desktop Payroll

Here are the options for desktop that run on the desktop version:

  • Basic: No payroll tax form filing, low cost.
  • Enhanced: Do-it-yourself payroll tax filing, good job costing, and the ability to pay 1099 vendors by Direct Deposit.
  • Full Service: Enter payroll hours/amounts, Intuit handles paying taxes and filing tax forms (though may vary by State).
  • Accountant’s Enhanced: All the features of Enhanced, up to 50 client EINs, can only be used on the accountant’s computer.

I find a lot of confusion on this: “Warning: Only add a company to a subscription if the company file is in your control and used strictly at your place of business. This is because anyone using a company that shares your payroll subscription can view or change your Payroll Service account.” So no, you cannot share your subscription with any of your clients if they are running their own payroll on their own computer.

Job costing is just so much better in the desktop version right now. A contractor who needs to code for function, job, and Worker’s Comp code can do this easily in the desktop payroll using payroll items, jobs, and classes, but it’s not as easy in an online version. And there will always be those of us who want our data on our desktops because who likes change? Many of us resist it, but change can be good.

One surefire way to tell if a product is the Online version or the Desktop version is to look at the Direct Deposit fees. For online versions, Direct Deposit is free, while in all Desktop versions it’s a charge per check.

Full Service Payroll is another option, for those clients who want someone else, other than you, to be responsible for tax payments and filings. In Full Service, Intuit assumes responsibility for federal and state payroll filings and payments directly from your account(s). Starting price is $79.00 plus $2.00 per employee per month for the first six months, and then it goes to its regular price of $99.00 per month, plus $2.00 per employee. Apparently after six months you’ll be so in love with it that an extra 20 bucks won’t stop you.

Whatever Happened to Assisted Payroll?

We used to have QuickBooks Assisted Payroll, which still shows up on a search, but this is now called Full Service, which at least gives us a better idea of what it does. With Assisted, I was never quite sure what kind of assistance was being given without delving into the specs. Full Service is a better name.

How About QuickBooks Standard Payroll?

We also used to have QuickBooks Standard Payroll, but this is what we call QuickBooks Enhanced Payroll. This is no longer an option for new subscribers.

Where Should Clients Purchase Payroll for Their Desktop QuickBooks?

The best place to purchase QuickBooks Desktop Payroll for your QuickBooks file is by call 888-255-9878 or within QuickBooks itself, unless you’ve purchased a product that comes with payroll. From within QuickBooks, you can purchase a payroll subscription by clicking on Employees, Payroll, Order Payroll Service.

When you do, you are given the following options:

If you select the first option, and then See My Plan, the suggestion is for Enhanced. If you select the second option, and then See My Plan, you get the Basic Payroll.

Basic is perfectly adequate software but it doesn’t have forms, and without forms, what have you got? Something that calculates payroll, which can also be done by spreadsheet if one is familiar with Circular 15. Intuit recognizes this limitation, which is why Basic is the option suggested for those who want their accountant to pay and file their payroll taxes. However, as an accountant, I don’t want to have to re-create someone’s payroll in order to file their quarterly and annual reports, and I also don’t want to have to take their file, put it on my computer, use my Enhanced Payroll to file reports, and then give them the file back. If you or a client is using Basic, I’d like to hear how you handle the filing of the taxes and forms. There are so many ways this can be done, and I’m interested in finding the most economical way.

There is also a $2.00 per employee charge each month, which is automatically charged to your payment method on file with Intuit (unless you’re using the Accountant’s Enhanced subscription). When you run a payroll, the information is transmitted to Intuit, whether you have Direct Deposit or not, and that’s how they know how many employees are being paid.

Unlike Online Payroll, QuickBooks Desktop payroll has a charge of $1.75 plus tax per direct deposit (just increased from $1.60).

The $2.00 per employee charge plus the direct deposit fees can really add up if you have many employees. For only 50 employees, that’s another $100 per month. You’ll need to evaluate all the incidentals to determine the true cost of this software for your clients.

QuickBooks Online Payroll advertises free direct deposit, perhaps in a bid to steer more people toward the online version. The $2.00 per employee per month fee still applies, whether desktop or online.

TIP: If direct deposit fees are too high for your client, check your bank’s ACH fees. A local bank had ACH fees that were much less than what the client would have had to pay in direct deposit fees, so I set up a Bank Clearing Account. The employees with direct deposit were set up on one payroll schedule, and the rest were set up with another. This particular client had only one payroll schedule, so this was easy. For the direct deposit payroll schedule, the “checks” all went to the Bank Clearing Account. Then the ACH from the bank was debited to the checking account and credited to the Bank Clearing Account, which should be zero at the end of every payroll.

Also, look at the small print to see when the price increases. You pay by the month or by the year.

Here’s a summary of what we’ve learned so far for QuickBooks Desktop Payroll:

Online Payroll, Briefly

There’s a difference between QuickBooks Online Payroll within QuickBooks Online, and Intuit Online Payroll. The first is integrated into QuickBooks Online, and runs from there. It’s even more important in this version to make sure that your tax rates and previous payrolls are recorded properly, because it’s not easy to change them with an adjustment, as can easily be done with Desktop. But for clients who have QuickBooks Online or who aren’t using QuickBooks at all, this may be a good option.

Within this category there are several options, depending on the version of QuickBooks Online. There’s also a Full Service option, which includes paying of taxes and tax filings.

  • Quickbooks Online Essentials with Payroll: $23.59 per month, valid for 12 months, and then going up to the current price, which is listed as $58.99. Accountant manages payroll taxes and filings.
  • Quickbooks Online Essentials with Full Service Payroll: $47.60 per month, valid for 12 months, then increases to current price, which is listed as $118.99. Intuit manages taxes and payments.

One thing Intuit has done that is very helpful is that they’re calling their products by the same name in whatever format you’re using. QuickBooks Online with Full Service Payroll is comparable, in terms of how much Intuit does and how much the end-user does, to QuickBooks Desktop Full Service Payroll.

Intuit Online Payroll runs outside of QuickBooks Online as a stand-alone product. This means that exports and imports into accounting software can be done fairly easily.

IOP4A, aka Intuit Online Payroll for Accountants

Like Intuit Online Payroll, the Accountant’s version is a stand-alone product, and it’s priced by client. There are no direct deposit fees, but there is a $2.00 per person monthly fee if you have one client. But here’s where there’s a big difference: the monthly fee and the per person fee drop when you get more clients on it, as shown below. The $0.50 per employee monthly fee with more than one client can make a huge difference in how much profit you can make on this product. Clients can have their own logins to do their own payroll, and once they’re set up, there’s only the taxes to worry about. It’s a great solution for payroll-only clients who want to run their own payrolls.

Send In Your Questions!

Please send in any payroll questions you have, and I’ll find out the answers—or certainly attempt to. There’s a world of payroll out there, and we’ve barely scratched the surface. So let’s get the conversation started.

Leave a Reply