QuickBooksHelpIntuit

Set up and configure payroll chart of accounts

by Intuit•2• Updated 4 days ago

Configure your payroll Chart of Accounts in QuickBooks Payroll powered by Employment Hero to ensure accurate journal entries and bank reconciliations. You can map specific accounts for wages, liabilities, and expenses, and further refine your reporting by splitting transactions by location.

Access the payroll chart of accounts

To begin configuration, you must access the specific Chart of Accounts page dedicated to payroll, which is separate from the standard QuickBooks Online Chart of Accounts.

Go to All apps , select Payroll, then select Employees (Take me there).
Select the Payroll Settings tab.
Select Chart of Accounts (Located under Business Settings).

Understand primary and default accounts

Primary accounts serve as the foundation for your payroll journals. Use these default mappings to automate how transactions flow to your general ledger.

Account Type	Description
Payment Account	Often called the "payroll clearing" account; used to reconcile net payments to bank transactions.
Wages Expense Account	Records gross wages expense for the pay run.
Default Payroll Liability Account	The destination for deductions if no specific liability account is set.
PAYG Liability Account	Tracks PAYG liability transactions; also called the PAYG clearing account.
Superannuation Expense Account	Tracks SGC super expense transactions.
Superannuation Liability Account	Tracks super liability transactions; also called the super clearing account.
Employee Expenses Account	Records employee expenses (not deemed part of wages) processed in the pay run.
Employer Liability Expense Account	Records employer liabilities recorded against an employee.
Employer Liability Account	Keeps track of general employer liability transactions.

Note: Transactions cannot be mapped to bank accounts directly. It is recommended to use a "clearing" account and reconcile the bank transaction against the clearing transaction in the journals.

Map specific categories

You can override default accounts by mapping specific categories to unique accounts for more granular tracking.

Pay Categories: Allocate specific wage expenses, such as bonuses or leave, to different accounts; otherwise, the default Wages Expense Account is used.
Deduction Categories: Assign specific deductions to unique accounts; otherwise, the Default Payroll Liability Account is used.
Expense Categories: Map specific expenses to different accounts; otherwise, transactions post to the Employee Expenses Account.
Employer Liability Categories: Assign specific liabilities to unique accounts; otherwise, transactions post to the Employer Liability Account and Employer Liability Expense Account.

Split transactions by location

If you use location or class tracking in QuickBooks Online, you can split your general ledger by location.

Split by Location: This option writes a transaction line per location to the journal for the same account.
Location Specific Accounts: Define unique accounts for specific locations; these function like primary accounts but only apply to their designated location.

Transaction mapping hierarchy

Journals are produced based on a hierarchy that matches transactions from the most specific level to the most general level:

Level 1 (Highest specificity): Location-specific Pay, Deduction, or Expense Category Mappings.
Level 2: Location-specific default account mappings.
Level 3: General Pay, Deduction, or Expense Category Mappings.
Level 4 (Most general): Default Account Mappings.

Export configuration

For users managing complex setups or multiple locations, the Export Configuration feature allows you to see all account usage in one spreadsheet.

Access Export Configuration within the Chart of Accounts page.
Alternatively, export via Data Extracts in your Payroll Settings.

QuickBooks Online EssentialsQuickBooks Online PlusQuickBooks Online Simple Start