Matching paycheques in QuickBooks Online

Your payroll accounts affect how you record payroll expenses in journal entries. Matching these journal entries with your bank account transactions ensures your records are accurate.

Overview of default payroll settings

Payroll journals are assigned by the default accounts selected within the Employees page. These settings ensure bank transactions are correctly reflected to credit the appropriate accounts.

To review your assigned accounts:

1. Go to Settings and select Payroll settings.
2. In the Accounting section, select edit icon .
3. In the Accounting Preferences page, review the assigned accounts.

These chosen accounts match the payroll journals created when a pay run is completed and sent to QuickBooks Online.

Match paycheques using a Clearing Account

If you use the default setup, you must manually add and match expense transactions.

Step 1: Match paycheques

1. Go to All apps , select Accounting, then select Bank transactions (Take me there).
2. Select the bank account used for employee payments.
3. Under the Pending tab, find and select the bank transaction.
4. From the Transaction type ▼ dropdown, select Expense.
5. From the Account ▼ dropdown, select the payroll account (e.g., Payroll clearing).
6. From the Tax ▼ dropdown, select the appropriate tax code (e.g., Out of Scope).
7. Select Post.

This creates a transaction that debits the bank account and credits the Payroll Clearing account. Repeat these steps if multiple bank line items make up a single pay run.

Step 2: Review your payments

The Payroll Clearing account should have a balance of zero after payments are added.

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

Note: You can also add Super payments as an Expense using the Superannuation Payables account. Follow the same steps above to verify this account also has a zero balance.

Step 3: Add bank rules (optional)

Bank rules automate categorization to speed up the review process.

1. Go to All apps , select Accounting, then select Rules (Take me there).
2. Select New rule.
3. Enter a name in the What do you want to call this rule? field.
4. From the Apply this to transactions that are ▼ dropdown, select Money in or Money out.
5. From the in ▼ dropdown, select a bank account, or select All bank accounts.
6. From the and include the following ▼ dropdown, select All or Any.
7. Select + Add a condition.
   Note: You can set a single rule with up to 5 conditions.
8. In the Conditions fields, specify whether the rule applies to Description, Bank text, or Amount. Then select Contains, Doesn't contain, or Is exactly and enter the value or text to decide how QuickBooks applies the rules.
9. Select Transaction type, Category, and Payee from the ▼ dropdown to apply.
   Note: You may see different options depending on the company settings you’ve turned on.
10. Select Save.

Match journal transactions using a Bank Account

If you pay employees using ABA files (bulk payment files), you can change the default bank payment account to your bank account instead of the clearing account. This allows you to match payments directly without adding extra expenses to clear the clearing account.

1. Go to Settings and select Payroll settings.
2. In the Accounting section, select edit icon .
3. In the Accounting Preferences page, review the accounts.
4. Run your regular payroll.
5. On the Bank transactions page, match the journal entry to the payment made.