Can't run payroll because it says he isn't set up for family leave

Thank you for reaching out, @RoniB. Running payroll is essential, and I understand how important it is to resolve this issue to keep everything running smoothly for your team. I can explain why QuickBooks is prompting you to set up Family and Medical Leave Insurance (FAMLI) for your Colorado-based employees before you can proceed with payroll. Together, we can walk through the setup process and ensure everything is in place so you can focus on your business.

Since all Colorado employers should collect premiums effective January 1, 2023, setting up the FAMLI Program in QuickBooks Online (QBO) is necessary before processing payroll.

First, let's add the policy from the Payroll settings. You can follow these steps:

1. Go to the Gear icon, followed by, Payroll settings.
2. From Colorado tax, select the pencil icon. Then, Create Policy.
3. Under Colorado Paid Family and Medical Leave Tax (PFML), select Start.
4. Enter the number of employees used to determine your rate and CO FAMLI Agency ID.
5. Select Define Rates. Then, type in your Policy Name.
6. Choose the effective start date. 
7. Enter the percentages for you and your employees. 
   a. For example, if you want to pay 50% of your employee’s 0.45% portion (you pay 0.225% and your employee pays 0.225%), enter 25 in the employer box. 25 will automatically added to the employee box.
8. Select Save, then Done.

Next, add the policy to each of your employees.

1. Go to Payroll, then Employees.
2. Select your employee.
3. In the Tax withholding section, click on Edit.
4. From State withholding, select + Assign policy.
5. Choose the policy name you've set up earlier.
6. Hit Save, then Done.
7. Repeat steps 2-6 for all other Colorado employees.
   

    

If you’ve run any payrolls before setting up this rate, don’t worry. We’ll automatically catch you up when you run your next payroll.

To learn more information about how the Colorado FAMLI program works, refer to this guide: Set up Colorado Family and Medical Leave Insurance Program (FAMLI).

I'm including this article to invite your employees to QuickBooks Workforce to see pay stubs, and W-2s after running payroll: Invite your employees to QuickBooks Workforce to see pay stubs, W-2s and more if you use QuickBooks Online Payroll.

Need more assistance? Our team of experts can help simplify your payroll process tailored to your needs, particularly by reviewing your QuickBooks Payroll setup: Explore QuickBooks Payroll.

I hope these details and information ensure that your payroll runs without a hitch and that all your employees are covered. If you need anything else or have additional questions down the line, feel free to click on the Reply button. We're here to support you every step of the way. Take care!