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Matching payroll payments in QuickBooks Online

SOLVED•by QuickBooks•87•Updated 2 weeks ago
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How you set up your payroll accounts affects the journal entries for payroll expenses.

This page will show you how to add and match those journal entries to transactions from your bank account.

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

  1. Go to Payroll and select Payroll Settings.
  2. Select Chart of Accounts from Business Settings.
  3. Select 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 accounts.

Adding Expense Transactions in Online Banking

Using the Payroll Clearing Account:

  1. Go to Transactions, then select Bank transactions (Take me there).
  2. Select the bank account you use for paying employees, then find and select the transaction.
  3. From the Transaction type dropdown, select Expense.
  4. From the Category dropdown, select the payroll account, for example, Payroll Clearing.
  5. From the GST dropdown, select an appropriate tax code, For example, Out of Scope.
  6. Select Confirm.

This will create a transaction to debit the bank account and credit the Payroll Clearing account. Repeat this process 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,

  1. Go to Settings ⚙ and select Chart of accounts (Take me there).
  2. Find the account name and select Account history.

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,

  1. Go to Settings ⚙ and select Chart of accounts (Take me there).
  2. Find the account name and select Account history.

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

  1. Go to Transactions and select Rules (Take me there).
  2. Select New rule.

You can speed up the review process and categorise transactions automatically by setting up bank rules.

Matching the journal transaction in Online Banking

Using the Bank Account as the Payment Account:

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. Go to Payroll and select Payroll Settings.
  2. Go to Chart of Accounts under Business Settings and select Default Accounts.
  3. Run the regular payroll.
  4. On the Transactions screen, you'll be able to match the journal entry to the payment made.
Have any other questions for our team?

If any of your questions were left unanswered, we'd love to hear them!
Pop over to our QuickBooks Community's discussion on payroll processes where you can ask your questions, have them answered by qualified QuickBooks Online experts, and hopefully help others with the same questions out in the process.

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