If you're subscribed to the Basic Limited Payroll service (purchased before December 2007), you can only pay three employees at a given time, which means that you can have only three active employees in QuickBooks.
Note: Owners and contractors aren't considered employees. See Paying an owner or partner and Paying independent contractors for more information.
You have the following options:
Learn about other payroll solutions offered by Intuit to meet your payroll needs—whether you prefer to do things yourself, or you want us to do it all for you: QuickBooks Payroll (Basic Unlimited Payroll, Enhanced Payroll, Enhanced Payroll for Accountants, and Assisted Payroll). For detailed information about QuickBooks Payroll services, go to the QuickBooks Payroll Web site.
Inactivate terminated or on-leave employees.