QuickBooks Error PS107 -- Payroll Update File Became Unreadable

Error PS107 stops a QuickBooks payroll update because an internal file turned unreadable; our engineers walk through restoring it so updates complete normally.

When QuickBooks Desktop downloads a payroll update, it unpacks the update payload into several internal support files and validates each one before applying changes. Error PS107 means that validation failed: one of those internal files is missing, truncated, or corrupted, and QuickBooks cannot continue the update.

What the error message says

The full message displayed in the update dialog reads:

QuickBooks has encountered a problem and needs to close. We're sorry for the inconvenience. Error code: PS107.

In some versions the message appears inside the "Get Payroll Updates" window with the additional note that the update could not be completed.

What the code means

The "PS" prefix places this error in the payroll-services family. The specific code 107 indicates that QuickBooks found an internal file in an unreadable state during the update extraction phase. The file in question is a component that QuickBooks uses to stage tax-table and payroll-form changes before committing them to the company file. When the staging file cannot be read, QuickBooks halts the update to avoid writing incomplete or inconsistent payroll data.

What triggers it

Our engineers see PS107 most often under the following conditions:

• Interrupted or incomplete prior payroll update. A network drop, system sleep, or forced restart during a previous update leaves a staging file partially written.
• Antivirus or security software quarantine. Real-time scanning flags a downloaded payroll component as suspicious and removes or locks the file before QuickBooks can read it.
• Damaged QuickBooks installation. One or more program-level files in the QuickBooks installation folder are corrupted, often after a hard shutdown or disk error.
• Windows file permission mismatch. The user account running QuickBooks lacks full read/write access to the folder where payroll update files are staged.
• Conflicting background process. Another instance of QuickBooks, or a leftover process from a crashed session, holds a lock on the update files.

How to fix it

Our engineers recommend working through these scenarios in order, starting with the most common cause.

1. Download the payroll update again in a clean state

1. Close all open company files and exit QuickBooks entirely.
2. Open Task Manager (Ctrl+Shift+Esc) and end any lingering QBW32.exe processes.
3. Reopen QuickBooks, sign in as the admin, and open your company file.
4. Go to Employees > Get Payroll Updates.
5. Select Download entire payroll update and click Update.
6. Wait for the progress bar to reach 100% without switching windows or letting the computer sleep.

If the update completes without error, the interrupted prior download was the cause.

2. Configure antivirus exclusions for QuickBooks

1. Open your antivirus or security software settings.
2. Add folder exclusions for:
   • C:\Program Files\Intuit\QuickBooks (or the folder where QuickBooks is installed)
   • C:\ProgramData\Intuit\QuickBooks
   • The folder where your company file is stored
3. Add file-type exclusions for *.qbw, *.qbb, *.nd, and *.tlg.
4. Save the exclusions and retry the payroll update.

3. Run QuickBooks as a full administrator

1. Right-click the QuickBooks desktop shortcut and select Run as administrator.
2. Open the company file and attempt the payroll update again.
3. If this resolves the error, adjust the shortcut properties so QuickBooks always runs with elevated permissions: right-click the shortcut, choose Properties > Compatibility, and check Run this program as an administrator.

4. Run QuickBooks Install Diagnostic Tool and repair the installation

1. Download and run the QuickBooks Tool Hub.
2. On the Installation Issues tab, click QuickBooks Install Diagnostic Tool and let it finish.
3. Restart the computer.
4. If the error persists, go to Windows Control Panel > Programs and Features, select QuickBooks, click Uninstall/Change, and choose Repair.
5. Restart again after the repair finishes and retry the payroll update.

5. Recreate the payroll staging folder

1. Close QuickBooks.
2. Navigate to C:\Program Files\Intuit\QuickBooks\Components\Payroll.
3. Rename the Payroll folder to Payroll_OLD.
4. Reopen QuickBooks and run the payroll update. QuickBooks creates a fresh staging folder automatically.

How to prevent it recurring

• Keep your QuickBooks release patched to the latest maintenance release before running payroll updates.
• Schedule payroll updates during a window when the computer will not sleep or hibernate.
• Maintain antivirus folder exclusions for the QuickBooks program and data directories permanently.
• Run updates while signed in as the Windows admin or a user with full permissions on both the QuickBooks installation folder and the company file folder.
• Avoid force-closing QuickBooks during any update operation; if the application appears frozen, wait several minutes before ending the process.