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Intuit

Payroll Liability and/or Balance Sheet Report shows incorrect amounts for payroll liabilities

If your company's Balance Sheet report shows incorrect figures for payroll liabilities in QuickBooks Desktop, there are a few reasons this can happen.

Here’s some common reasons it can happen for each payroll version and how to fix them.

DIY Payroll

How to determine the source of payroll liability balances

  1. To view the details of the payroll liabilities from the balance sheet, double-click the amount to see the Transaction by the Payroll Liability Item report. Double-click on any amount to review the paycheck or liability adjustment associated with the balance. The balance amounts that appear are the amounts of the payroll liabilities associated with that paycheck.
  2. Run a Payroll Liability Balance report to view any outstanding balances that need to be paid or deposited by selecting Reports at the top menu bar then Employees and Payroll, then Payroll Liability Balances.
  3. Look for Payroll Liability Payments or Liability Refunds that were not entered correctly in QuickBooks Desktop:If there are credits (negative amounts) showing in the Payroll Liability Balance report, You may have a credit/refund that hasn’t been entered yet or you entered the deposit out of the payroll module using 'Make Deposit'. To zero out negative balances resulting from entering deposit through Make Deposit, do the following:

Note: Balances may also be due to the wrong amount entered on the Liability Check or Deposit Refund. For example: if your total payable liability for 401(k) is $ 1,000.00 but the amount you entered in the liability check is 1,100.00, the difference of $100.00 will appear on your liability balance report as (negative) -100.00 indicating you overpaid by this amount. It’s recommended that you verify the most recent past payments made with your receipts/confirmations outside of QuickBooks Desktop.

Assisted Payroll

Note:

  • If your Payroll Liability Balance report shows a zero amount, don’t create a liability adjustment to make corrections on the Balance Sheet. Doing so might alter the payroll data and negatively affect the payroll taxes that Intuit files and pays on your behalf.
  • If the problem is caused by missing or incorrect amounts in the QuickBooks Desktop payroll liability check, contact us for assistance.

You may have a missing or voided liability check from Assisted Payroll, creating positive balances for taxes paid for you by Intuit.

To find and fix missing Assisted Payroll liability checks:

  1. Run a Vendor QuickReport for QuickBooks Desktop Payroll Service (only applies to Assisted payroll customers).Choose Vendors on the top menu bar and select Vendor Center. Right-click QuickBooks Desktop Payroll Service then choose Quick Report.
  2. Review the Quick Report to verify whether all liability checks are recorded.
  3. Contact us to recreate the missing or voided liability check.

You may have created journal entries for liabilities paid by Intuit, causing you payroll liability balances to be overstated in the Balance Sheet.

Journal entries affect the Balance Sheet but not Payroll Liability Report.

If the balances on your Balance Sheet are caused by manual entries outside of the payroll module that were posted to your Liability Account, you can remove or edit them. We recommend that you check with your accountant before deleting a journal entry that was made incorrectly.

DIY and Assisted Payroll

You may have posted the payroll item to the wrong account in your Chart of Accounts.

Payroll Liabilities should post to a Liability Account in your Chart of Accounts.

To review the payroll item set up and edit as needed, see steps below:

  1. Go to the Reports menu, and select Employees and Payroll then Payroll Item Listing.
  2. Review the Expense and Liability Account columns to verify that the accounts are correct for each payroll item.
  3. If the account is incorrect, double-click on the account name from the report to open/edit the payroll item.
  4. Select Next.
  5. Edit the account.
  6. Select Next until you can select Finish and then select Finish. If you’ve already used an Expense item in the past, you’ll need to choose an option to continue:Update all existing transactions to use this new account.Update transactions starting on [calendar date chooser]Don't update any transactions.
  7. Open a new Balance Sheet report to verify that this solved the inconsistency.

Negative balances may be due to voiding a paycheck after you have paid or created the liability check.

If you void a paycheck after you have already paid the liabilities associated with the paycheck, negative balances will show on your Payroll Liability account for payroll items and taxes that were reported on that check.

If you void a Direct Deposit paycheck after you have already sent it to Intuit, your Direct Deposit Liability Account will also show a balance for the amount of Direct Deposit. To fix balances in your Direct Deposit Liability Account, see Account balance for Direct Deposit liability is not zero.

These balances will also reflect on your financial reports. To learn more about the consequences of void and how to fix your report, see Recreate a voided or missing Direct Deposit paycheck or Assisted paycheck.

Payroll liabilities deducted from an employee paycheck (such as 401(k), 403(b), and garnishments) were not paid to vendors using Create Custom Liability Payments or Pay Scheduled Liabilities.

To correct the payment of the liabilities:

  1. Run a Payroll Liability Balances report to see if the balances exist in this report.
  2. Choose the Reports menu and select Employees and Payroll then Payroll Liability Balances.
  3. Open the 'Write Check' or 'Bill Payment' originally used to record the liability payment, copy down the details of the payment, and then delete it.
  4. Record the liability check correctly through Create Custom Liability Payments or Pay Scheduled Liabilities.

Liability adjustments are set to Do not affect accounts.

Setting Do not affect accounts when entering liability adjustments will cause the adjustments to not show up in the bank register, and not change the payroll liability and expense accounts.

To find and correct this:

  1. Go to Employees menu and select Payroll Taxes and Liabilities then Adjust Payroll Liabilities.
  2. Select the Previous Adjustment button until you find the adjustment affecting the report.
  3. Select the Accounts Affected button.
  4. Choose Affect liability and expense accounts and then select OK.
  5. Select the OK button to prompt an error to save the transaction. Save the transaction to prompt an additional message requiring you to choose an Expense, Asset, or Liability Account for employee liabilities.
  6. Select OK.

You may have company file data damage causing this issue.

If your Payroll Liability Balance Report is zero but data does not match your Balance Sheet, check for data damage. Data damage in the mapping of accounts can cause error inflow of data from one transaction or report to another. Run the Verify Data/Rebuild Data processes to correct any data damage.

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