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QuickBooks Error 05396 40000 & 00000 XXXXX During Payroll Setup

Often, QuickBooks error code 05396 40000 comes up when trying to set up payroll in the desktop application. This is one of the payroll setup errors and can also arise when you change the filing method. 

quickbooks payroll setup 2023 to fix  error code 05396 40000

The payroll setup errors generally have XXXXX XXXXX format.

If you open the payroll setup wizard in QuickBooks and see the error 05396 40000 or a similar error, do not worry. In this guide, we will discuss the reasons why you see the error and show you how to troubleshoot it.

fix quickbooks error code 05396 40000 & 00000 XXXXX

1. Install Latest QuickBooks and Payroll Updates

Before we begin troubleshooting QuickBooks Error Code 05396 40000, let us make sure that you have the latest software and payroll updates installed.

  • Open QuickBooks Desktop and go to the top menu bar
  • Select Help, followed by Update QuickBooks Desktop.
update quickbooks desktop
  • Now, tap on Update Now.
  • Choose Get Updates.
  • Close and reopen QuickBooks, which will install the update.

Now, once again, go to the top menu bar of QuickBooks 

  • Choose Employees, followed by Get Payroll Updates.
  • Tap on Download Entire Update.
  • Click on Update
  • You will see a confirmation window once the update is complete.

When you have the latest release for QuickBooks Desktop and the payroll services, restart the computer. Now, launch QuickBooks Desktop and run the payroll setup wizard again.

If you still find the QuickBooks error code 05396 40000, proceed to the next solution to resolve it.

2. Find the Error Message

Let us begin with searching for the particular error message by utilizing a report.

Find the Error Message
  • When you see the error message, click on View Report
  • Now, double-tap the ReportHeader.xml file. 
  • On your keyboard, press the Ctrl + F keys together. This will open the search box.
  • In the search box, type in Exception String 0 and hit Enter.

You will be able to see the specific error message on your screen that will appear after the words Exception String 0

For example, the bold text below is the error message you should look for.

Exception String 0 System.Exception: exception thrown in background thread —> System.ArgumentException: Item has already been added. Key in dictionary: ‘(unnamed employee)’ Key being added at System.Collections.SortedList.Add(Object key, Object value) 

Once you find the specific error message you need help with, follow the instructions given in the next step. 

3. Carry Out Specific Troubleshooting for the Error Message

Check what error message you see after the exception string, and follow the steps given for the error to resolve it.

a. Item has already been added. Key in dictionary: “[Vendor or payroll item name]” Key being added.

This error message shows a specific vendor name or payroll item. It means there is a duplicate vendor or payroll item with the same name. 

resolve the duplicate vendor or payroll item

Here is how you can resolve the duplicate vendor or payroll item

  • Tap on Vendors and choose Vendor Center.
  • Click on Items followed by Payroll Item List.
  • Locate which Vendor or Payroll item is listed in the error message. 
  • If you see more than one item, skip the next step. 
  • Click on Show Inactives, which shows potential duplicate items if there are any. 
  • Attempt to delete the duplicate item. However, if the item has been used already in any transactions in QB, you won’t be able to delete it. Alternatively, you can edit the item, rename it, and then save it. 

Now, reattempt the payroll setup and check if you face the error 00000 XXXXX while doing so.

b. Item has already been added. Key in dictionary: ‘(unnamed employee)’ Key being added.

This error message indicates one or more duplicate employees exist in the employee list. 

Therefore, we need to correct this. Here’s how:

  • Tap on Employees and go to Employee Center.
  • Click on the View drop-down menu and choose All Employees.
  • Now, you can also see the inactive employees.
  • Locate employee names that come more than once. This will help you identify duplicate employees.
  • Right-tap on the duplicate name and choose Delete Employee.
go to employees and go to employee center choose delete employee in qb
  • Sometimes, you might not be able to delete a duplicate employee if payroll transactions exist for that employee. Therefore, move the transactions to the first employee listed.
  • Now, attempt to delete the duplicate employees again. Do this for all the duplicate employees.
  • However, if you find that there are no payroll transactions for the duplicate employee and yet you can delete it, the reason might be corrupted time card data.
  • To resolve that, navigate to Employees followed by Enter Time. Locate the entries with odd or invalid characters.

Once done, continue with the payroll setup and check if the QuickBooks error code 05396 40000 is resolved.

c. Item has already been added. Key in dictionary: ‘(unnamed employee)’ ‘the specified special account already exists’

The error message signifies: 

  • The existence of a blank space at either end of an employee’s first or last name
  • First and last name fields for one or more employees might both be completely blank. (When this happens, you only see the name in the Print on the check as field in the employee profile).

However, the employee names will show in the employee list as normal, which is why you must review each employee’s profile.  

Here is how you can correct employee names:

  • Tap on Employees and choose Employee Center.
  • Select the View drop-down and choose All Employees. Now, the list will also contain inactive employees.
  • Now, review each employee’s first and last name fields by opening the employee profiles. If you see any blank spaces on either end of the employee’s first and last name, delete them. However, if you find the first or last name missing, enter them.

Once done, continue with the payroll setup and see if the error 00000 XXXXX has been resolved.

d. Value does not fall within the expected range

When you see this error message, there is usually a specific code, such as 00000 99867 or 00000 88703.

Let us see what you should do in case of both these errors separately. 

(i) Error 00000 99867 implies there is no state set up for the employee in their employee profile. 

Therefore, let us locate the employee with a missing state and correct that:

  • Tap on Employees, and go to Employee Center.
  • Right-click on the employee list anywhere, and choose Customize Columns
  • Choose State Lived from the Available Columns list. Now tap on Add.
  • Choose State Worked from the Available Columns list. Now tap on Add. 
  • Tap on OK
  • Double-tap the employee that has missing state(s).
  • Tap on Payroll Info followed by Taxes.
  • Now, click on the State tab and choose the correct state.
  • Repeat these steps for all employees that have missing state(s)

This should resolve the error 00000 99867 for you.

(ii) Error 00000 88703 implies the first and last name fields for one or more employees might both be completely blank. (When this happens, you only see the name in the Print on the check as the field in the employee profile).

The employee names, however, display normally in the employee list. Therefore, review every employee’s profile.

Here is how to review and correct the employee names

  • Tap on Employees and choose Employee Center.
  • Select the View drop-down and choose All Employees. Now, the list will also contain inactive employees.
  • Now, review each employee’s first and last name fields by opening the employee profiles. If you see any blank spaces on either end of the employee’s first and last name, delete them. However, if you find the first or last name missing, enter them.

However, if you see the error without a specific code, it implies an unexpected amount in a payroll item. Therefore, locate and update the amount that is outside the range using the Payroll Checkup.

e. Font ‘Arial does not support style ‘Regular’…

The error message implies corrupted or missing Arial font in the Windows Operating System. To resolve this, contact the IT support.

f. The storage category map is invalid for the Local tax payroll item.

The error message implies the local tax was incorrectly added to an employee profile. Therefore, let us create and review some reports and locate the local tax item without the type as Other

creating an employee withholding report

Let us locate the incorrect local tax item and correct it.

  • Begin with creating an Employee Withholding report.
    • Tap on Reports followed by Employees & Payroll.
    • Choose Employee Withholding.
    • Tap on Customize Report.
    • Go to the Columns and remove the checkmarks from the current items. 
    • Choose these items: Employee, Local Tax 1, Local Tax 2, Local Tax 3, Local Tax 4, Local Tax 5, Local Tax 6, Local Tax 7, Local Tax 8, Local Tax 9, Local Tax 10, Local Tax 11, Local Tax 12.
    • Click on the Filters tab and choose Active Status.
    • Choose All, followed by OK.
    • You can leave the report open or print or choose Excel, and select the option to Create New Worksheet which will export to Excel.
  • Now, create a Payroll Item Listing report.
    • Tap on Reports and choose Employees & Payroll
    • Click on Payroll Item Listing.
    • Go to Customize Report.
    • Now, remove the checkmarks from all the items, excluding Payroll Item and Type.
    • Click on Active Status and choose All.
    • Tap on the Filters tab and choose OK.
    • You can leave the report open, or print, or export it to excel by choosing Excel followed by Create New Worksheet.
  • Compare both the reports and find the Local Taxes without the type Other.
  • Now, for employees whose tax item type is not Other, double-tap the employee from the Employee Withholding report. This will open the employee profile.
  • Choose Payroll Info and click Taxes.  
  • Click on the Other tab and remove the tax item without the type Other.  
  • Tap on OK two times. This will save the changes.

Finally, attempt the payroll setup again and check if the QuickBooks error code 05396 40000 has been resolved.

g. System.IO.FileNotFoundException:Could not load file or assembly…

The error message implies missing or corrupted QuickBooks. Therefore, you will need to repair QuickBooks Desktop. 

However, if that doesn’t resolve the QuickBooks payroll setup error 00000 XXXXX, you will need to Clean install QB Desktop in Selective Startup.

Wrapping It Up

This was all about how to resolve QuickBooks error code 05396 40000 and 00000 XXXXX during the payroll setup. However, if you find an issue while carrying out the given steps or run into an issue, speak to an expert.

If the troubleshooting was unsuccessful and you’re still struggling with the QuickBooks payroll setup error, get assistance from an expert. They are the experts when it comes to resolving issues with QuickBooks Desktop and Online. Call +1(800) 780-3064 and connect to A2 auto Care experts.

1. How do I fix error 30159 in QuickBooks?

To resolve the error 30159, navigate to Employees > My Payroll Service > Manage Service Keys. However, if you find the key incorrect, tap on Edit and provide the correct service key. Moreover, you might need to repair QuickBooks Installation as a corrupted QuickBooks installation can be the reason for error 30159. To fix that, you can run the QuickBooks Install Diagnostic Tool.

2. How do I fix error code 40001 in QuickBooks desktop?

Here is how to resolve the error code 40001 in QuickBooks Desktop:
a. Begin by checking the internet connectivity.
b. Now, verify the Payroll Service Setup.
c. Moreover, update the credentials or payroll service.
d. Check and configure the firewall or security software settings.
e. Another thing you can do is try and run QuickBooks Desktop in safe mode.
f. Finally, if nothing works, try to repair the QuickBooks Desktop Installation.

3. How to fix payroll setup error in QuickBooks desktop?

To resolve the payroll setup error, begin with updating QuickBooks software and the payroll version. Moreover, check the service key and edit it if it is incorrect.

4. How to do payroll setup in QuickBooks Desktop?

Here is how to do payroll setup in QuickBooks Desktop:
a. Select Payroll and type in year-to-date information.
b. Provide the payroll information and other employee data.
c. Check the paychecks twice and generate them.
d. Finally, tap on Confirm.

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