Hey there, @MaryG0. Thanks for taking the time to reach out to the QuickBooks Community. I hope you're having a great day so far. In the past, we've seen customers set loans up as cash advances to the employees. If this is the route you feel would work for you, I'm including some steps below to set it up. To create a paycheck for the advance, you need to set up an other earnings pay item and rename it as "Advance Payment." Here's how: Set up Other Earnings pay type. In the Additional Pay Types section, select Other Earnings. Select Edit to rename it as Advance Payment. Add the amount or enter it as you run payroll. When finished, select Save. Once done, create a cash advance repayment item to get your money back from your employee. Here's how: Go to Payroll, then Employees. Select your employee. From Deductions & Contributions, click on Start or Edit. Tap on + Add deduction/contribution. From the dropdown menu, add the following: Deduction/contribution type: Other taxable deductions Type: Cash Advance Repayment Description: Add a deduction name, such as "Cash Advance Repayment." Hit Flat amount. Enter the amount to deduct from your employee’s paycheck. If you need to collect the advance over more than one paycheck, enter the total amount owed in the Annual maximum field. When finished, select Save. Once done, create a paycheck with the repayment payroll item. Don’t forget to remove the amount from the item when your employee is done paying back the advance. This way, it doesn’t keep collecting. For more information about this process, check out the help articles I'm including below. Set up and repay employee advances Set up a cash advance repayment deduction Please keep in mind it's always important to consult with your accounting professional before making any changes to your books. If you don't have an accountant, don't sweat it. You can find one here in our Resource Center. Don't hesitate to let me know if you have any additional questions or concerns. Take care!

Question

If I lend an employee money from my business, how would I set it up on QuickBooks online to take money from his/her pay check every week?

Forum|Forum|1 year ago
October 2, 2024
1 reply
24 views

No text available

QuickBooks Online

Tori B

QuickBooks Team

Hey there, @MaryG0.

Thanks for taking the time to reach out to the QuickBooks Community. I hope you're having a great day so far.

In the past, we've seen customers set loans up as cash advances to the employees. If this is the route you feel would work for you, I'm including some steps below to set it up.

To create a paycheck for the advance, you need to set up an other earnings pay item and rename it as "Advance Payment."

Here's how:

Set up Other Earnings pay type.
In the Additional Pay Types section, select Other Earnings. Select Edit to rename it as Advance Payment.
Add the amount or enter it as you run payroll.
When finished, select Save.

Once done, create a cash advance repayment item to get your money back from your employee.

Here's how:

Go to Payroll, then Employees.
Select your employee.
From Deductions & Contributions, click on Start or Edit.
Tap on + Add deduction/contribution.
From the dropdown menu, add the following:
- Deduction/contribution type: Other taxable deductions
- Type: Cash Advance Repayment
- Description: Add a deduction name, such as "Cash Advance Repayment."
Hit Flat amount.
Enter the amount to deduct from your employee’s paycheck.
If you need to collect the advance over more than one paycheck, enter the total amount owed in the Annual maximum field.
When finished, select Save.

Once done, create a paycheck with the repayment payroll item. Don’t forget to remove the amount from the item when your employee is done paying back the advance. This way, it doesn’t keep collecting.

For more information about this process, check out the help articles I'm including below.

Please keep in mind it's always important to consult with your accounting professional before making any changes to your books. If you don't have an accountant, don't sweat it. You can find one here in our Resource Center.

Don't hesitate to let me know if you have any additional questions or concerns. Take care!

M

MaryG0Author

What if it's a large amount, let's say $20,000, can I still set it up as a cash advance?

Z

ZackE_

Moderator

Thanks for following up with the Community, MaryG0.

If your Payroll account can support limits for processing this cash advance repayment deduction, you'll be able to create a functioning deduction and observe it in action.

In the event your limits don't support processing this amount of a deduction, it won't be processed until the limits reset. When limits don't support processing an amount, you'll usually see a "Your payment amounts are much larger than usual. If you still want to make these payments by direct deposit, request a direct deposit limit increase." message.

These limits are based on the total amount of direct deposits for all employees/contractors paid in a 6-day period (including weekends) from your paycheck date.

You can review these limitations from the Payroll settings screen.

Here's how:

Use the Gear icon.
Go to Payroll settings.
Scroll to your Direct deposit section.
Review the current limits in place.

If you're interested in raising what your current limitations are, you can submit a request to Intuit for it to be raised. Requests for limit increases are reviewed within 2 business days and the results are emailed to you. Bank statements may be required to approve requests.

Please don't hesitate to send a reply if there's any additional questions. Have a wonderful Wednesday!

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