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Join nowHey folks! this year our company has offered 401k to its employees, I'm looking to correctly record employee contributions in the QuickBooks desktop program.
side note: we are using adp for payroll services.
previously I would enter in the payroll info as checks taken out of our bank accounts into the following accounts.
payroll expenses 401k
payroll expenses adp fee
payroll expenses deductions
payroll expenses gross pay
payroll expenses payroll taxes.
deductions I would enter in as a negative number, because charges they had accumulated would be removed from their paychecks, then later I would make a journal entry to cancel out the AR Employee account with the deductions account. now that we have the new deductions of the employee contribution I'm not sure how to go about recording this.
Any employee deduction from gross wage will be handled by ADP and would never be something you would need to record separate in QB since you do not produce and file any of your own payroll forms, including W2. Your expense for labor is gross wage + employer taxes + employee benefits (401k), etc.
One place i se a huge error is your recording of payroll taxes as an expense since it is possible you are expensing both the employer and employee share. Employee deductions are a payroll liability not an expense. The liability is removed when the deductions are paid to whichever authority. Same with your company employment taxes, they are an expense but sit as a liability like unpaid vendor bills untilmdeducted from your bank account. You might be double dipping payroll tax expense
thanks for the help!
sadly our previous bookkeeper passed away and we are still trying to get a solid hold on doing our own books. so if we are not using the payroll function on qb what would be the proper way to enter in the payroll info?
Hi there, @Roki.
You can set up manual payroll in QuickBooks Desktop so you can create a payroll check. It contains the gross pay, complete list of your deductions, and you can record each payroll item to the proper account.
There isn't a need to pay for your subscription with a manual payroll. You'll just have to calculate, enter payroll taxes, and file your tax forms yourself if necessary.
To start, please ensure your computer is offline or not connected to the internet. Then, follow these steps to set up your company preferences for payroll:
Once done, you can now create the manual payroll. Here's how:
Also, there are other ways on how you can record these payroll expenses in QuickBooks Desktop (QBDT). Here are those:
Furthermore, in case you want to reinstate payroll tax calculations, you'll have to sign up for QuickBooks Desktop Payroll.
Please let me know if you have other concerns. I'm just around to help.