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Level 1

Can I delete the "payroll clearing account" and simply reconcile each wage payment in the bank feed to a "Wage Expense" account?

Hi all,

New to Quickbooks Online and the Payroll functionality. 

Our business has 4-5 employees who are paid weekly via manual electronic payment from the business bank account. I'm trying to figure out how to simplify the reconciliation process and ideally would just like to reconcile each wage payment to a "Wage Expenses" expense account.

Am I able to delete the Payroll Clearing account and simply reconcile as above? Or will this create problems down the line?

Thanks.

Solved
Best answer 03-12-2019

Accepted Solutions
Level 2

Hello simonfarrow, Payroll Clearing is a default account...

Hello simonfarrow,

Payroll Clearing is a default account and can’t be deleted. But you can still match your wage expenses. Here's how:

  1. Click on Banking tab.
  2. Click on the bank account used for paying employees, and then find the transaction.
  3. Select the add option.
  4. Select expense for the transaction type, and then assign the account as Payroll Clearing.
  5. Add out of scope for the Tax code, and then click on Add.

This will create a transaction to debit the bank account and credit the Payroll Clearing Account

The two primary reasons to use a payroll clearing account are enhanced security and more efficient reconciliations and analyses.

Also, employees earn wages or salaries, which are recorded in the general ledger under wage expense. If you’ll record the employees wage under the wage expense, it will duplicate your wage expense.

To read more about matching payroll, please check this article: Matching Payroll in QuickBooks Online (Australia only)

Let me know if you have any other questions. I'll be here to help you.

View solution in original post

3 Comments
Level 2

Hello simonfarrow, Payroll Clearing is a default account...

Hello simonfarrow,

Payroll Clearing is a default account and can’t be deleted. But you can still match your wage expenses. Here's how:

  1. Click on Banking tab.
  2. Click on the bank account used for paying employees, and then find the transaction.
  3. Select the add option.
  4. Select expense for the transaction type, and then assign the account as Payroll Clearing.
  5. Add out of scope for the Tax code, and then click on Add.

This will create a transaction to debit the bank account and credit the Payroll Clearing Account

The two primary reasons to use a payroll clearing account are enhanced security and more efficient reconciliations and analyses.

Also, employees earn wages or salaries, which are recorded in the general ledger under wage expense. If you’ll record the employees wage under the wage expense, it will duplicate your wage expense.

To read more about matching payroll, please check this article: Matching Payroll in QuickBooks Online (Australia only)

Let me know if you have any other questions. I'll be here to help you.

View solution in original post

Level 1

Re: Hello simonfarrow, Payroll Clearing is a default account...

Hi simonfarrow. I’ve been using quickbook as book keeping but haven’t used payroll. I pay manually using internet banking. I’ve set up the wage for employee under Wage expense but once I start using payroll do I change it to Payroll clearing? Do I need to do anything for those transactions(wages I’ve payed without using payroll)??

Level 1

Re: Can I delete the "payroll clearing account" and simply reconcile each wage payment in the bank feed to a "Wage Expense" account?

God! Thanks a lot, I have been killing myself trying to fix it and thanks to you, I finally did.