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Level 1

How do I set up my payroll so that the employer portion of taxes shows as both an expense under payroll expenses and a liability under payroll liabilities until it's paid

I know employee withholding is not an expense as it's already accounted for in the gross pay expense.  That automatically posts to the correct payroll liabiliites account.  The employer portion of the taxes posts as a payroll expense, which is also correct.  BUT...when the 941 files it pays both the employee withholding AND the employer portion and posts as a reduction of my payroll liability, again just as it should.  The only issue is that the employer portion never posts to the payroll liability account.  Is there a way to AUTOMATICALLY have the expense posted to the liability account as well?  Is this a manual entry I need to make each payperiod to post to the payroll tax liability account so it will show correctly on my balance sheet?  Right now my balance sheet shows I've overpaid all my payroll taxes by the amount of my employer portion of taxes.  How do I fix this?

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Best answer 10-19-2018

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Level 12

If you set up payroll yourself then you would have to man...

If you set up payroll yourself then you would have to manually enter the expense debit and liability credit.

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3 Comments
Level 12

If you set up payroll yourself then you would have to man...

If you set up payroll yourself then you would have to manually enter the expense debit and liability credit.

View solution in original post

Level 12

If you are using quickbooks payroll the employer portion...

If you are using quickbooks payroll the employer portion should automatically post to the payroll liability account even though it is an expense. Sir Isaac Newton said for every action there is an opposite and equal reaction. In accounting this means double entry. For the employer share to post as an expense it also has to post somewhere else at same time. Look at those entries to see where they are going. Sounds like it is posting not where it should.
Level 2

Re: If you are using quickbooks payroll the employer portion...

Perhaps this doesn't apply to this scenario, but using QB Enterprise 2015 plus all previous versions, ever since Payroll went out of sight, I simply entered my checks manually, entering the appropriate taxes. When I paid the appropriate vendors, liabilities automatically posted to their proper places. Are you saying that has been taken away in later versions?

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