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Matching payroll in QuickBooks Online

Payroll Journals Setup Overview

The setup of your payroll accounts determines the journal entries that you use to record payroll expenses. Learn how you can easily add and match journal entry to transactions from your online bank account.

Default Settings

Payroll journals are assigned by the default accounts selected within the Employees tab.

  1. Select Employees from the left menu
  2. Click on Settings > Business Settings > Chart of accounts
  3. Click on the Default accounts to reveal the assigned accounts.

The accounts selected correspond directly with the payroll journals that are created when the pay run is finalised and submitted to QuickBooks Online. These accounts are important when making sure the transactions from the bank are reflected properly in QuickBooks Online to credit the liability accounts.

Payroll Clearing Account - Adding Expense Transaction in Online Banking

To match the payments made for Payroll

  1. Click Banking from the left Menu
  2. Click on the bank account used for paying employees, then find the transaction.
  3. Click on the transaction, then select the Add radio button.
  4. Choose expense for the transaction type, then assign the account as Payroll Clearing.
  5. Add out of scope for the Tax code, then click ADD on the far right (beside Split).

This will create a transaction to debit the bank account and credit the Payroll Clearing Account. This process needs to be repeated if there are multiple line items from the bank comprising the original pay run amount for amounts paid.

After adding the payment(s), the Payroll Clearing Account should have a balance of zero. To verify this, go to the Chart of Accounts and double-click the account name to view the register.

Super payments can also be added as an Expense, but the account selected is Superannuation Payables.After adding the payment(s), the Superannuation Payables account should also have a balance of zero. To verify this, go to the Chart of Accounts and double-click the account name to view the register.

Bank Rules can be used to make the adding process easier.To add a bank rule:

  1. Click Banking and then Bank Rules.
  2. Click New rule .

Bank Account as Payment Account - Matching Transaction in Online Banking

If you are using ABA files (bulk payment files) to pay your employees, you can change the default bank payment account to the bank account instead of the payroll clearing account. This can make it a little easier because it allows you to match the payment from your bank account as opposed to having to add expenses to clear the payroll clearing account (the default setting).

  1. Click Employees  in the left menu
  2. Click Payroll Settings > Chart of Accounts > Default Accounts.
  3. Run the regular payroll.
  4. On the banking screen, you will be able to match the journal entry to the pay made.

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