3rd party payroll

jenakason · ‎January 07, 2025

We use a 3rd party to process our payroll. I am trying to learn how to correctly classify our payroll expenses in our Quickbooks system in order to have necessary information when running reports. I've gathered that I need to make a journal entry for each individual paycheck from the 3rd party to include gross wages, deductions, and taxes. I'm looking for a list of which category/account each item should be used to make sure I am doing it correctly. Attached is an example of our payroll register for one of our employees. Could someone list out how I would enter this example in a journal entry (which categories/accounts to use)? I can see that the gross pay less deductions less taxes equals the net pay, but curious where the employer paid tax would come from...Also, once the direct deposit is taken from our account by the 3rd party for the entire payroll period to pay the employees, how do you reconcile that? Same with the tax payments that they make on our behalf.

MitchMac · ‎January 08, 2025

Hellow @jenakason , what you might want to check out for reference is the following:

1. open the Sample Product file within QuickBooks

2. go to the Banking menu and select Write Checks

3. click on check #10073 in the left panel (this will bring up an old paycheck example)

4. go to the Reports menu and select Transaction Journal

This will open a report showing the debits and credits for the individual check that you can use for reference if you want. It will make it easier to understand how to fill out a Journal Entry with the accounts and amounts you are looking at.

You can also check out the following link that will have some more information available on it, it references QuickBooks Online but the premises works for QuickBooks Desktop Mac as well.

https://quickbooks.intuit.com/learn-support/en-us/help-article/write-checks/manually-enter-payroll-p...

jenakason · ‎January 08, 2025

Thanks for the info. I ran across that other post as well. To make sure I am entering information accurately for an actual payroll transaction, would you be able to confirm the accounts/amounts for the snapshot I had included?

MitchMac · ‎January 08, 2025

Unfortunately I wouldn't be able to confirm this for you, I did throw together a mock-up of what it 'could' look like, but I'd recommend double checking with an accountant to confirm the details. In the mock-up I'm missing a couple things in there, but this is what the basics could look like.

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3rd party payroll