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windylou
Level 4

Final paycheck has negative net pay

An employee that quit last week has a negative amount for his last paycheck & QB won't let me enter that. It's correct. Employee only worked 3.4 hours for final paycheck at $13/hour. Subtract SS & Med of $3.39, net amount is $40.81. Employee has an advance balance of $49.97 from an advance he got of $150 a few weeks ago. QB won't let me enter this negative paycheck, but I don't want to show this advance balance. I suppose I could just expense it as a bad debt....

1 Comment
MikiD
QuickBooks Team

Final paycheck has negative net pay

I'd be happy to share some information about your concern, windylou.

 

Since QuickBooks wont allow to create a negative net paycheck, you'll need to write off the unpaid advanced balance. 

 

Let's first create an expense account to track the bad debt/ Write off. Here's how:

  1. Go to the Lists menu and select Chart of Accounts.
  2. Select the Account menu and then New.
  3. Select Expense, then Continue.
  4. Enter an Account Name, for example, Bad Debt.
  5. Select Save and Close.

Create an additional payroll item under the Bad debt expense account:

  1. Click List at the top. 
  2. Choose Payroll Item List
  3. Click Payroll item at the bottom and select New.
  4. Choose Custom Setup
  5. Choose Addition and click Next
  6. Enter the name (Write Off) click Next
  7. Choose the Expense account you've created and Hit Next and choose None for Tax Tracking type. 
  8. Click Next four times and Finish

Once done, use the write off item to offset the negative amount. 

 

Lastly, you might also want to consult your accountant about this process. 

 

Stay around if you need anything else. 

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