How to Fix QuickBooks Error PS038: Step-by-Step Guide

If you’re running payroll in QuickBooks and suddenly encounter QuickBooks Error PS038, you’re not alone.  This common error usually appears when trying to update or send payroll data, preventing you from processing employee paychecks smoothly.  The error message typically reads:

“Error PS038: QuickBooks has encountered an issue and needs to close.”

While this can be frustrating—especially when payroll deadlines are tight—the good news is that it’s a fixable problem. In this step-by-step guide, we’ll explain what QuickBooks Error PS038 means, why it occurs, and how to resolve it effectively. We’ll also touch on related issues like the QuickBooks Unrecoverable Error, which sometimes accompanies payroll glitches.

What Is QuickBooks Error PS038 and Why Does It Occur?

QuickBooks Error PS038 generally occurs when one or more paychecks get “stuck” in the payroll system—specifically, marked as to be sent but not actually transmitted to Intuit’s servers. Because of this, every time you try to update payroll or process new paychecks, QuickBooks gets stuck attempting to resend the old data, triggering the error.

This error can occur in both QuickBooks Desktop and QuickBooks Enhanced Payroll, and it’s often linked to issues such as:

•  Outdated payroll tax table updates.

•  Damaged QuickBooks data files.

•  Network interruptions during payroll transmission.

•  Paychecks saved in an incomplete or pending state.

•  Incorrect pay period or employee setup.

If not fixed, Error PS038 can prevent you from updating payroll, processing employee payments, or downloading the latest tax rates—making it essential to resolve as soon as possible.

Understanding the Root Cause of QuickBooks Error PS038

To fix QuickBooks Error PS038, it’s crucial to understand what triggers it behind the scenes.

When QuickBooks processes payroll, each paycheck is assigned a transmission status (Sent, To Send, or Received).  If a paycheck remains marked as “Online to Send” due to incomplete processing or synchronization issues, QuickBooks continuously tries to resend it every time payroll updates are initiated.

This looping process results in Error PS038, especially if:

•  The network connection drops mid-transfer.

•  The payroll update was interrupted or corrupted.

•  Your QuickBooks company file has minor data damage.

In some cases, you might even experience a QuickBooks Unrecoverable Error while attempting to reopen payroll forms or reprocess stuck paychecks.  This can occur if damaged data prevents the software from executing payroll-related actions properly.

Step 1: Verify and Rebuild Data in QuickBooks

One of the most effective ways to fix QuickBooks Error PS038 is by using the built-in Verify and Rebuild Data tools.  These tools scan your company file for inconsistencies and repair minor corruption that could be causing payroll problems.

 To verify your data:

1. Open QuickBooks Desktop.

2. Go to File > Utilities > Verify Data.

3. Wait for the scan to complete. If QuickBooks detects an issue, it will prompt you to rebuild your data.

 To rebuild data:

1. Go to File > Utilities > Rebuild Data.

2. When prompted, back up your company file.

3. Allow QuickBooks to rebuild your data.

Once done, recheck if you still receive Error PS038 when processing payroll.

Step 2: Identify Stuck Paychecks

If the error persists, the next step is to locate the paychecks causing the problem.

 Here’s how to find them:

•  Open QuickBooks Payroll Center.

•  Go to the Transactions tab.

•  Click Paychecks and apply filters for the current year.

•  Double-click each paycheck and review the status line.

 Any paycheck marked as “Online to Send” is likely contributing to the PS038 error.

Step 3: Update QuickBooks and Payroll Tax Table

Running outdated software or payroll tables is one of the top causes of payroll errors.  Make sure both are fully updated:

To update QuickBooks Desktop:

•  Go to Help > Update QuickBooks Desktop.

•  Click Update Now and install all available updates.

To update payroll tax tables:

•  Go to Employees > Get Payroll Updates.

•  Check the box for Download Entire Update.

•  Click Download Latest Update.

•  Restart QuickBooks after the updates are installed and attempt to resend your payroll data.

Step 4: Send Stuck Paychecks Again

Once you’ve identified the stuck paychecks and updated QuickBooks, you can attempt to resend them.

• Go to Employees > Send Payroll Data.

• Review the list of paychecks under “Items to Send.”

• Select the problematic transactions and click Send All.

If successful, QuickBooks should confirm the transmission and remove the “Online to Send” status.  This usually resolves QuickBooks Error PS038 permanently.

Step 5: Fix QuickBooks Unrecoverable Error (If It Appears)

Sometimes, when working on payroll data or trying to resend paychecks, you might encounter a QuickBooks Unrecoverable Error—a generic crash that prevents the program from performing an action.

Here’s how to fix it:

• Close QuickBooks and restart your computer.

• Open QuickBooks Tool Hub (download from Intuit’s official site if you don’t have it).

• Go to Program Problems > Quick Fix My Program.

• Relaunch QuickBooks and retry your payroll task.

If the issue continues, use Company File Issues > Run QuickBooks File Doctor inside the Tool Hub to repair deeper file-level damage.

Step 6: Recheck Payroll and Reconcile

After fixing the error, make sure your payroll is accurate:

• Reopen Payroll Center and confirm that no paychecks are pending.

• Run a Payroll Summary Report to ensure all wages and taxes are updated correctly.

• Compare your payroll liabilities against your bank register.

 This double-check ensures that no data was lost or duplicated during the repair process.

Step 7: Backup and Prevent Future Errors

Once QuickBooks Error PS038 is resolved, create a fresh backup of your company file.  Keeping regular backups is one of the best ways to avoid data loss and payroll interruptions.

 To prevent the error in the future:

• Always process payroll with a stable internet connection.

• Avoid interrupting payroll updates mid-process.

• Update QuickBooks Desktop and payroll tax tables regularly.

• Run Verify Data at least once a month.

Conclusion

Dealing with QuickBooks Error Code PS038 can be stressful, especially when payroll is due.  However, with the right troubleshooting steps—verifying data, updating payroll, and resending stuck paychecks—you can resolve it efficiently and prevent future interruptions.

 If you continue to experience QuickBooks Error PS038 or encounter a QuickBooks Unrecoverable Error during payroll processing, professional help is just a call away.

 ? Contact our QuickBooks Support Team at +1-866-500-0076 for expert assistance.  We’ll help you fix payroll errors, repair your data, and get your QuickBooks running smoothly again—so you can focus on your business, not technical glitches.