Learn how a zero net paycheck can be created in Online Payroll.

There are three reasons you might want to create a paycheck that has a net pay amount of zero.

  • Put an entire paycheck into a retirement plan.
  • Designate an entire paycheck for income tax.
  • Record a gift made to an employee. Such as cash or a gift card.

We'll show you how to create the net zero paycheck using Online Payroll.

Put an entire paycheck toward retirement

If an employee wants to withhold an entire paycheck and put it toward retirement follow these steps.

QuickBooks Online Payroll

  1. Add an Other Earning pay type to the employee's profile.
    • Set the amount to 0 or leave the $ field blank.
    • Rename it as Taxable offset. Or create your own name.
  2. Setup a 401(K) Retirement plan deductions. Set the deduction amount to 0
  3. Use the Net to gross formula to determine the gross pay amount.
  4. Select Workers followed by Employees.  Then select Run payroll.
  5. Select a pay schedule. And an employee.
  6. Enter 1 in the Taxable offset box. Then select Preview payroll.
  7. Select the edit (pencil) icon beside the Net pay amount.
  8. In the Taxable offset box, enter the amount determined by using the net to gross formula. Make sure that the other pay types are 0.
  9. In the Employee taxes section, zero out Federal Income Tax and State Income Tax. (Optional).
  10. In the Employee deductions section, enter the 401(k) amount.
  11. Select OK. Then select Submit payroll.

Intuit Online Payroll

  1. Add an Other Earning pay type to the employee's profile.
    • Set the amount to 0. Or leave the $ field blank.
    • Rename it as Taxable offset. Or create your own name.
  2. Set up a 401(K) Retirement plan deductions. Set the deduction amount  to 0.
  3. Use the Net to gross formula to determine the gross pay amount.
  4. In the Payday tab:
    • Select a pay schedule. And an employee.
    • Enter 1 in the Taxable offset box. Then select Create Paychecks.
    • In the Approve Paychecks page, select View/Edit.
    • In the Taxable offset box, enter the amount determined by using the net to gross formula. Make sure that the other pay types are 0.
    • Enter the gross amount determined by using the net to gross formula in the Taxable offset field.
    • Zero out federal and state income taxes. (Optional)
    • Select Add deduction. Then select the  401(k) deduction you set up.
    • Enter the desired 401(k) amount in the 401(k) box. Then select Save.
    • Select Approve Paychecks.

Put an entire paycheck toward income tax

If an employee wants to withhold an entire paycheck and put it toward income tax.

QuickBooks Online Payroll

  1. Add an Other Earning pay type to the employee's profile.
  2. Use the Net to gross formula to determine the gross pay amount.
  3. Select Workers followed by Employees.  Then select Run payroll.
  4. Select a pay schedule. And an employee.
  5. In the Other earning box, enter the amount determined by using the net to gross formula.
  6. Select Preview payroll.
  7. Select the edit (pencil) icon beside the Net pay amount.
  8. Zero out all unwanted deductions
  9. Edit the Federal Income tax or State Income tax amount. Then select OK.
    • Enter the sum of the current Net pay amount, and the federal or state income tax amount.
  10. Select Preview Payroll. Then select Submit payroll.

Intuit Online Payroll

  1. Add an Other Earning pay type to the employee's profile.
  2. Use the Net to gross formula to determine the gross pay amount.
  3. In the Payday tab:
    1. Select a pay schedule, and the employee.
    2. Enter the gross amount determined by the using net to gross formula in the Other earnings box.
    3. In the Other earnings box, enter an amount determined by using the net to gross formula.
    4. Select Create Paychecks.
    5. Select View/Edit. Then select Edit.
    6. Edit the Federal Income tax or State Income tax amount. Then select Save.
      • Enter the sum of the current Net Pay amount. And the federal or state income tax amount.
    7. Select Approve Paychecks.

Record a gift made to an employee

Since the employee already received the gift, you don't want to increase the net pay of the check. You'll be using what's called an "in and out" method. The "in" will be adding the gift as regular wages so it can be properly taxed. And the "out" will be pulling the gift back out of the check since it was already paid.

QuickBooks Online Payroll

  1. Set up an after-tax deduction for the "out" portion and an Other Earning pay type for the "in" portion. Set the after-tax deduction amount as 0. Leave the other earning amount blank.
  2. Select Workers followed by Employees.  Then select Run payroll.
  3. In the Other earning box, enter the amount employee received.
  4. Select the edit (pencil) icon beside the Net pay amount.
  5. In the Employee deductions section, enter the same amount as the current net pay in the other after-tax box.
  6. Select Preview Payroll. Then select Submit payroll.

Intuit Online Payroll

  1. Set up an after-tax deduction for the "out" portion and an Other Earning pay type for the "in" portion
    • Set the after-tax deduction amount as 0 and leave the other earning amount blank.
  2. In the Payday tab:
    • Select a pay schedule and the employee.
    • In the Other earning box, enter the amount employee received.
    • Select Create Paychecks.
    • Select View/Edit. Then select Edit.
    • Select Add deduction. Then select the after-tax deduction you set up.
    • In the deduction box, enter the same amount as the current net pay. Then select Save.
    • Select Approve Paychecks