Collect mandatory legal + payroll information before entry.

✅ Action Item: Add a New Employee
How-To:

• Go to Payroll → Employees → Add Employee

• Enter legal name, SSN, birthday, and contact info

• Upload W-4 and I-9 forms to their profile

• Set hourly rate or salary

• Select correct workers’ comp code (WA required)

Tip: Mark whether they are a W-2 employee vs a subcontractor (1099).

This ensures labor costs go to the correct job + report category.

✅ Action Item: Assign Payroll Items
How-To:

• Open employee profile

• Click Compensation → Add Pay Type

• Include: Regular, Overtime, Sick Pay (WA law), Bonuses

• Under Accounting, map wages to Cost of Goods Sold → Direct Labor

• Map taxes to Payroll Liabilities

Tip: If you see labor inside “Expenses”… it’s wrong ✔️

Every hour must be tied to a job to calculate true profit.

✅ Action Item: Turn on Job Costing
How-To:

• Go to Settings → Advanced → enable Projects & Job Costing

• Require time entries to select a Customer/Job

• Connect QuickBooks Time (TSheets) for mobile clock-ins

Tip: GPS tagging proves employees were on the jobsite.

✅ Add a “Subcontractor Compliance Exhibit” to your main construction contract template for future projects.

Consistency = better reporting + happy employees.

✅ Action Item: Schedule Payroll
How-To:

• Go to Payroll → Pay Schedules

• Choose Weekly (recommended for construction)

• Turn on Auto Payroll if hours are pre-approved

• Use Alerts for approval deadlines

Tip: Payday delays damage morale faster than anything else.

Never miss a payroll tax deadline again.

✅ Action Item: Turn On AutoTax
How-To:

• Go to Payroll → Taxes → Set Up AutoFile

• Add your EIN, state accounts (ESD, L&I), and bank details

• QuickBooks will automatically send:
  ✔ Federal withholding
  ✔ Social Security & Medicare
  ✔ WA Paid Family & Medical Leave
  ✔ Workers’ comp & unemployment insurance

Tip: WA L&I audit risk is high — keep class codes correct.

Prevents costly mistakes and supports clean year-end filing.

✅ Action Item: Review Payroll Reports
How-To:
Monthly:

• Reports → Payroll Summary → compare hours & wages to expected

• Adjust workers’ comp codes if role changes

Quarterly:

• Confirm 941 filings, L&I premiums, and ESD payments submitted

• Store confirmation emails in a payroll folder

Tip: Review Workers’ Comp Experience Rating annually — lower rate = higher profit.

Keep everything organized for audits and financial transparency.

✅ Action Item: Create a Payroll Compliance Folder

How-To:

Inside Google Drive or QuickBooks Attachments:

• Add folders labeled: Employee Files, Payroll Reports, Tax Notices, W-4/I-9 Forms

• Upload docs right after each payroll run

• Share CPA-level access only

Tip: Store 3–4 years of history — legally required.

✅ Accurate job costing → better bids
✅ Zero tax penalties → lower overhead
✅ Organized payroll → faster scaling
✅ Happy employees → higher retention

You become the contractor who knows his numbers 💪

Due Diligence is the difference between designing with confidence and building on guesswork.

What is in the Master Class?

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