Easy Tech TutsHow to Make an Employee Inactive in QuickBooks Online Easily 2026
By Impran M N
Offboarding a staff member shouldn't mean erasing their payroll history. This guide shows how to mark an employee inactive in QuickBooks Online so they're archived out of your active directory while preserving compliance records.
01Open the employee directory
Go to Payroll, then Employees, to see your full staff list.
02Open the employee's profile
Click on the specific employee's name to open their profile setup panel.
03Edit employment details
Find the Employment details section and click the Edit pencil icon.
04Set the status to inactive
Open the Employment Status dropdown and choose Inactive or Terminated, then enter their last day of work.
05Save and verify
Click Save or Done, then check the Status filter above your employee grid to confirm the profile now appears under Inactive Employees.
Frequently asked questions
Does making an employee inactive delete their payroll history?
No, historical payroll and tax records are preserved even after an employee is marked inactive.
Can I still see inactive employees in my directory?
Yes, use the status filter above the employee grid and select Inactive Employees to view archived profiles.
Do I need to enter a reason for the status change?
It's optional, but choosing a reason from the dropdown helps maintain a clear HR log for future reference.
Can I reactivate an employee later?
Yes, you can reopen their profile and change the Employment Status field back to Active if needed.
Watch the full walkthrough
The same steps, demonstrated on screen from start to finish.
