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Matching payroll payments in QuickBooks Online

by Intuit•12• Updated 3 months ago

Your payroll accounts affect how you record payroll expenses in journal entries. This page will teach you to add and match those journal entries with your bank account transactions.

Select this heading for an overview of the default settings

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

Go to Payroll and select Payroll Settings.
Select Chart of Accounts from Business Settings.
Select Default accounts to reveal the assigned accounts.

The accounts chosen match the payroll journals made when the pay run is done and sent to QuickBooks Online. These accounts are important to make sure the bank dealings are shown right in QuickBooks Online to give credit to the accounts.

Adding Expense Transactions in Online Banking

Using the Payroll Clearing Account:

Step 1: Match the payments made for Payroll

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

Step 2: Review your payments

After adding the payment(s), the Payroll Clearing account should have a balance of zero. To verify this,

Go to Settings ⚙ and select Chart of accounts (Take me there).
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,

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

Step 3: Add bank rules (optional)

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

Go to Transactions and select Rules (Take me there).
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 use ABA files (bulk payment files) to pay your employees, you can change the default bank payment account to your bank account instead of the payroll clearing account. This change can make things easier because you can match the payment from your bank account. You don't have to add expenses to clear the payroll clearing account (the default setting).

Go to Payroll and select Payroll Settings.
Go to Chart of Accounts under Business Settings and select Default Accounts.
Run the regular payroll.
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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