How to Set Up Pay Schedule in QuickBooks Online

Setting up a pay schedule is one of the first and most important steps in managing payroll, ensuring your team is paid accurately and on time, every time. A consistent schedule maintains employee trust and simplifies your own cash flow management. This guide walks you through every step of creating, managing, and assigning pay schedules in QuickBooks Online, so you can run payroll with confidence.

Why a Consistent Pay Schedule is Foundational for Your Business

Before jumping into the “how-to,” it’s helpful to understand why this is so important. A pay schedule isn't just about picking a date on a calendar; it’s a core component of your operational and financial workflow. It establishes a predictable rhythm for both you and your employees.

Here are the primary benefits of having a well-defined pay schedule:

• Regulatory Compliance: Many states have specific laws dictating minimum pay frequencies. For example, some jurisdictions require that hourly employees be paid at least bi-weekly or semi-monthly. A formal schedule helps ensure you remain compliant with your state's Department of Labor regulations and avoid potential penalties.
• Improved Employee Morale: Consistency builds trust. When employees know exactly when they're getting paid, they can manage their own finances more effectively. This reliability reduces financial anxiety and contributes to a more stable and positive work environment.
• Simplified Cash Flow Planning: Payroll is often a business's largest expense. A fixed schedule allows you to predict your exact cash outflow for payroll, taxes, and benefits each month. This makes budgeting and financial planning far more accurate, preventing unexpected cash-flow crunches.
• Efficient Payroll Processing: A predictable schedule streamlines your administrative process. You know exactly when you need to collect timesheets, calculate overtime, and run the payroll report. This automation prevents last-minute scrambling and reduces the chance of errors.

Common Pay Frequencies

The first decision you'll need to make is how often to pay your employees. Here are the four standard options offered in QuickBooks Online Payroll:

• Weekly: Paid once a week on the same day (52 paychecks per year). This is common in industries with a high number of hourly workers, like construction and hospitality.
• Bi-weekly: Paid every two weeks on a specific day, such as every other Friday (26 paychecks per year). It's a popular choice for businesses with many hourly employees as it simplifies overtime calculations which are often based on a 40-hour workweek.
• Semi-monthly: Paid twice a month on specific dates, such as the 15th and the last day of the month (24 paychecks per year). This schedule is often used for salaried employees because the pay periods aren't always a clean 80 hours, which can slightly complicate overtime calculations for hourly staff.
• Monthly: Paid once a month on a specific date (12 paychecks per year). This is the least common option in the U.S. and often reserved for executive positions or salaried managers. Some states prohibit monthly pay schedules for hourly workers.

Information to Gather Before You Start

To make the setup process smooth, have the following information ready before you log into QuickBooks:

1. Chosen Pay Frequency: Decide if you will pay weekly, bi-weekly, semi-monthly, or monthly. You can set up multiple schedules if, for example, you want to pay hourly staff bi-weekly and salaried staff semi-monthly.
2. Your Next Payday: Determine the exact date your employees will receive their next paycheck under this new schedule.
3. The End Date for that Pay Period: This is the final day of work being paid for in that paycheck. For instance, if your next payday is Friday, October 20th and you have a one-week lag, the pay period end date would be Saturday, October 14th. The lag gives you time to process hours and calculations.
4. List of Employees for the Schedule: Know which employees will be assigned to this schedule. It's often helpful to create separate schedules based on employee type (i.e., "Bi-Weekly Hourly" and "Semi-Monthly Salaried").

Step-by-Step: How to Set Up a New Pay Schedule in QuickBooks Online

With your information gathered, you're ready to create the schedule inside the system. The process is straightforward and takes just a few minutes.

Step 1: Get to Your Payroll Settings

From your QuickBooks Online dashboard, look for the gear icon (⚙️) in the top right corner of your screen. Click on it to open a dropdown menu. Under the "Your Company" column, select Payroll Settings.

Step 2: Find the Pay Schedules Section

On the Payroll settings page, you'll see several options. Look for the "Company and Account" section. Underneath it, you'll find a line item for Pay Schedules. It usually appears between "Direct Deposit" and "Deductions / Contributions". Click on Pay Schedules.

Step 3: Create the New Schedule

This screen will show any existing pay schedules. To add a new one, click the green Create button located in the top-right corner.

Step 4: Define the Pay Schedule Details

A new window will appear, prompting you for the details you gathered earlier. Here’s what each field means:

- How often do you pay your employees? (Pay Frequency): Use the dropdown menu to select *Weekly, Bi-weekly (every 2 weeks), Semi-monthly (twice a month)*, or *Monthly*.

- What is the next payday?: Use the calendar tool to select the date your employees will get their deposits or live checks for the next payroll run.

- What is the last day of work for this pay period?: Use the calendar to select the end date of the work period that corresponds to the payday you just entered. QuickBooks will automatically calculate future pay periods for you based on these two dates.

- Give this pay schedule a name: This is a descriptive name for your own reference. Be specific! Good names could be "Hourly Staff - Bi-weekly" or "Salaried - Semi-monthly." This prevents confusion if you have multiple schedules.

Step 5: Assign Employees to the Schedule

After you fill out the details above, a list of your employees will appear. You can check the box next to each employee’s name to assign them to this new schedule right away. Don’t worry if you miss someone or aren’t sure yet; you can always assign them later from their individual employee profile.

Step 6: Save and Done!

Once you’ve named the schedule and assigned at least one employee (or none, if you plan to do it later), click the Done button. Your new pay schedule is now active and will appear on your list of schedules in the Payroll settings.

Managing Existing Pay Schedules and Employee Assignments

Your work doesn't stop after the initial setup. You'll need to know how to edit schedules and change employee assignments as your business grows and changes.

How to Add or Change an Employee's Pay Schedule

If you hire a new employee or need to move an existing one to a different schedule, follow these steps:

1. Navigate to the Payroll tab in the left-hand menu and select the Employees tab at the top.
2. Click on the name of the employee you want to update.
3. In the employee's profile, find the Pay section and click the pencil icon to edit it.
4. The very first question is "How often do you pay [Employee Name]?". Use the dropdown menu to select the correct pay schedule.
5. Click Done to save your changes.

This is the most common way you will interact with pay schedules on an ongoing basis.

A Note on Editing or Deleting a Pay Schedule

QuickBooks Online has safeguards to protect your payroll history. You cannot delete a pay schedule if it has any employees assigned to it or if it has been used to run payroll in the past.

If you truly need to get rid of a schedule, you must first reassign every employee on that schedule to a different one. Once the schedule has zero employees assigned, a "delete" option will become available next to it in the Pay Schedules list. Similarly, you cannot easily change the core frequency or dates of a schedule once it has been used. The standard practice is to create a new, correct schedule and move the employees over.

Best Practices & Common Scenarios

Applying the tool effectively requires understanding some common payroll scenarios.

Scenario: Separate Schedules for Salaried and Hourly Staff

It is a highly recommended best practice to set up distinct pay schedules for your hourly and salaried employees. Salaried employees have fixed annual earnings, so the consistent paycheck amounts from a semi-monthly or monthly schedule are easy to manage. Hourly employees' pay can fluctuate based on hours worked and overtime. A bi-weekly schedule aligns nicely with a 40-hour workweek, making it simpler to accurately calculate their earnings, especially overtime, and meet state wage laws.

Scenario: Paying Bonuses or Final Checks

What if you need to pay an employee outside of their regular schedule? For things like performance bonuses, commissions, or a final paycheck for a departing employee, you should not disrupt your main schedule. Instead, use QuickBooks' off-cycle payroll feature.

When running payroll, you can choose to run a special payroll run. Options often include "Bonus only," "Commission only," or a final paycheck calculation. This keeps your regular payroll reports clean and ensures taxes are handled correctly for these one-off payments.

Final Thoughts

Setting up your pay schedule correctly in QuickBooks Online is a gateway to organized, compliant, and stress-free payroll. By defining your frequency, setting key dates, and assigning employees accurately, you build a reliable system that benefits both your business and your team.

Once your payroll processes are in place, the questions don't stop. As your business grows, you'll face more complex challenges around state nexus, employee benefits, and tax law compliance. Instead of spending hours sifting through forums for answers you can’t be sure are correct, you can use Feather AI to get instant, audit-ready answers backed by authoritative sources. We give professionals the confidence to turn complex tax questions into clear, actionable advice.