QuickBooks Payroll Error PS038: Why It Happens and How to Solve It

Posted by Jinny
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Sep 11, 2025
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QuickBooks Payroll is a powerful tool that simplifies the payroll process for businesses of all sizes. However, it isn’t immune to occasional errors that disrupt workflow. One common roadblock that many users face is QuickBooks Payroll Error PS038. At first glance, this error can feel intimidating, especially when it delays paycheck processing or prevents payroll updates. But don’t worry—this article will guide you step-by-step through why the error occurs, how you can fix it, and the resources available to get you back on track quickly.

What is QuickBooks Payroll Error PS038?

QuickBooks Payroll Error PS038 is an error that typically shows up when you attempt to run payroll or download the latest tax table updates. The error message usually involves being stuck on “online payroll” or pending paychecks. Essentially, QuickBooks believes there are paychecks waiting to be processed, but the software is unable to send or accept them. As a result, you may encounter delays in payroll execution or tax compliance tasks.

This error is especially critical for business owners since payroll is time-sensitive, and any delay can affect employee satisfaction. That’s why resolving QuickBooks Payroll Error PS038 promptly is crucial.

Why Does Error PS038 Occur?

Several underlying causes can trigger this error. The most common reasons include:

  • Outdated QuickBooks Desktop or Payroll version

  • Damaged QuickBooks company file data

  • Pending paychecks that are “stuck” in an unsubmitted state

  • Unstable internet connection during payroll update downloads

  • Corruption in payroll data due to abrupt system shutdowns

Understanding the root cause makes it easier to apply targeted solutions without unnecessary guesswork.

Signs You Are Facing Payroll Error PS038

Before fixing the problem, you need to confirm the symptoms. You’re likely dealing with QuickBooks Payroll Error PS038 if you notice:

  • QuickBooks not updating payroll tax tables

  • Paychecks showing as “stuck,” even though they should be processed

  • Payroll updates freezing mid-way

  • Inability to send or download payroll data

  • Error message prompting you to retry but no progress being made

If these signs are interrupting your payroll activities, it’s time to take action immediately.

Steps to Fix QuickBooks Payroll Error PS038

Resolving this error requires a mix of troubleshooting steps. Here are the most effective methods to clear the issue:

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