Manual journal entry to record payroll not being included in Payroll Taxes

HeadsHurtin · ‎January 12, 2024

Good Afternoon,

The owner of the company who normally takes a pay each pay period, did not take a pay for 2 consecutive pays as there was a shortage of funds. I Credited these pays via JE as owners contributions (I hope that was correct) vs a credit to the bank as no money changed hands.

The issue is that even though I recorded the payroll source deductions as though the pay was sent, when I run the payroll taxes through Payroll -> Pay .... the taxes deducted on the journal entry are not included in the amount to pay to CRA.

Any guidance would be appreciated.

Thank you.

N.

Amanda-B · ‎January 12, 2024

Thanks for getting back to me here,

I can appreciate the steps you've taken, as advised by your accountant. It's important to keep in mind that Journal entries are beneficial when funds need to be moved, in keeping accounts balanced. In your situation, QuickBooks Online Payroll is an add on, for which all calculations are done within the Payroll feature. This is aligned with government guidelines and prevents possible penalties for late, or inaccurate filings. For this reason, the associated payroll taxes to be applied to the payroll remittances, would need to automatically calculated within QuickBooks Online Payroll, for the periods indicated in your original post. When running payroll for the dates required, you'll simply change the preference to paper cheque, so it doesn't submit as direct deposit.

I hope this helps!

View solution in original post

Amanda-B · ‎January 12, 2024

Good afternoon, HeadsHurtin.

I appreciate you reaching out to the Community for support. I'd be happy to point you in the right direction.

In order to ensure that the Payroll taxes are hitting the Payroll tax center, you'd need to run payroll for those periods. You can run them as paper cheques. If you require assistance regarding the JE, I recommend reaching out to an accounting professional. They'll be able to help prevent any duplicate amounts as well as discrepancy when reconciling. You can add your accountant to your books by following the steps provided in this article. If you don't have an accountant, you can find one near you by clicking on this link.

If you have any other questions, feel free to reach back out.

HeadsHurtin · ‎January 12, 2024

Thanks Amanda for your response.

It was the accountant that told me to create a journal entry. unfortunately this is a QBO issue as it was their assumption the Pay Tax function would pick up the Journal Entry.

Thanks.

N.

Amanda-B · ‎January 12, 2024

Thanks for getting back to me here,

I can appreciate the steps you've taken, as advised by your accountant. It's important to keep in mind that Journal entries are beneficial when funds need to be moved, in keeping accounts balanced. In your situation, QuickBooks Online Payroll is an add on, for which all calculations are done within the Payroll feature. This is aligned with government guidelines and prevents possible penalties for late, or inaccurate filings. For this reason, the associated payroll taxes to be applied to the payroll remittances, would need to automatically calculated within QuickBooks Online Payroll, for the periods indicated in your original post. When running payroll for the dates required, you'll simply change the preference to paper cheque, so it doesn't submit as direct deposit.

I hope this helps!

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Manual journal entry to record payroll not being included in Payroll Taxes