How do you divide out third party payroll liabilities in Quickbooks Online?

JAFence · ‎February 05, 2021

I am trying to resolve a few issues with our payroll since we began using ADP as our third party payroll service this past summer. There are 4 deductions made from our Business Checking account every week for payroll, which is reflected in our Quickbooks account to reconcile. The four weekly deductions made are:

#1- Net Pay

#2- All taxes (EE and ER combined)

#3- ADP Fees

#4- Garnishment for an employee's Child Support

My first question is for the lump sum taxes (#2) that show up as a deduction to reconcile.

For example:

$-962.69 is a total taxes deducted for one weekly payroll

I have been reconciling this into my Federal Taxes (941/944) account but it contains taxes that need to be divided into other tax liability and expense categories. Following the example above, this is the way the taxes need to be divided up in my already existing accounts/categories:

EE TAXES- Liabilities

Federal Taxes (941/944) including SS and Medicare- $-514.63

State Income Tax- $-131.59

State PMFL- $-10.78

ER TAXES- Expenses

Taxes (including FUTA, State unemployment and match of SS and Medicare)- $-305.69

How do I accomplish this? How also do I balance out these taxes- since all our payroll taxes have been paid through this past year? I do not want to unbalance the Business Checking Account which all of our business transactions flow through. I am nervous to make adjustments without having more knowledge. Would I need to split the tax or make a journal entry?

My second question is for the net pay (#2) deducted. I have realized that since the gross pay is not recorded, I don't have an accurate amount on my P & L. The net pay for the year is recorded instead. As I understand it on the P and L the Payroll Expenses are Gross Wages and Employer Taxes. How do I adjust the Wages to reflect gross pay and not net pay?

I am somewhat new to Quickbooks and would love detailed instructions, if help can be provided. Thanks in advance.

MadelynC · ‎February 05, 2021

I can guide you every step of the way, @JAFence.

Thanks for reaching out to the Community for assistance. I have some information that can help settle your payroll concern in QuickBooks Online.

Yes, you can create journal entries to manage the entries and keep your payroll and account data all in one place. Just ensure you have set up tracking accounts for payroll liabilities and expenses. These accounts cover the most common payroll tax situations.

Here’s how:

Go to the + New.
Select Journal Entry.
Enter/select the accounts affected and the amounts.

This detailed guide about manually enter payroll paychecks will help you accomplish and manage them properly in QuickBooks. That way, your taxes, and reporting are accurate.

Please let me know if you have other payroll concerns. I’m determined to help here for your success. Always take care.

JAFence · ‎February 07, 2021

Hello,

Thank you for the response but that does not answer my question. I am not entering in payroll information. The payroll deductions for NET PAY, TAXES (EE AND ER) FEES and WAGE GARNISHMENTS were automatically entered by ADP, our third party payroll, and have been reconciled. I need to make adjustments so that they are accurately represented in QB and in our year end reports.

I am looking to see how to split out the taxes that have already been entered. Some, like FUTA and SUI, will have to hit both payroll expenses and payroll liabilities accounts. Do I go into the register or the GL to pull up this lump sum tax deduction and "Add Lines" to divide it out, and how do I split the FUTA and SUI to hit both accounts?

I also do not know how to produce the Year End Reports P and L without the gross pay in Quickbooks. ADP deducts the net pay. Does having a third party payroll service mean that our year end reports will always have to be adjusted outside of Quickbooks to reflect the actual expense of payroll for that year?

JAFence · ‎February 07, 2021

Hello,

Thank you for the response but that does not answer my question. I am not entering in payroll information. The payroll deductions for NET PAY, TAXES (EE AND ER) FEES and WAGE GARNISHMENTS were automatically entered by ADP, our third party payroll, and have been reconciled. I need to make adjustments so that they are accurately represented in QB and in our year end reports.

I am looking to see how to split out the taxes that have already been entered. Some, like FUTA and SUI, will have to hit both payroll expenses and payroll liabilities accounts. Do I go into the register or the GL to pull up this lump sum tax deduction and "Add Lines" to divide it out, and how do I split the FUTA and SUI to hit both accounts?

I also do not know how to produce the Year End Reports P and L without the gross pay in Quickbooks. ADP deducts the net pay. Does having a third party payroll service mean that our year end reports will always have to be adjusted outside of Quickbooks to reflect the actual expense of payroll for that year?

CharleneMaeF · ‎February 07, 2021

Let me route to the correct support, JAFence. Thanks for sharing more details about your concern.

It's best to contact our QuickBooks Support Team. They are equipped with tools to guide you with the process. This ensures all the data are correctly matched in QuickBooks.

You can follow these steps to reach out to them:

For the old Help menu interface:

Click the Help (?) icon at the top.
Choose the Contact Us button.
Type your issue or question on the What can we help you with box.
Proceed with the Let's talk button.
Select the Start messaging option.

For the new Help menu:

Click the Help (?) icon at the top.
Type Talk to a human.
Enter your issue or question on the What can we help you with box.
Choose I still need a human.
Select the Start messaging option

If you want to keep a copy of your payroll reports for future use, you can print or export them. To accomplish this, select either the Export to Excel or Printer Friendly option from the Share drop-down.

I'm always around to lend a hand if you have more questions about managing your payroll reports in QBO. Just tag my name in the comment section so I can assist you further.

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How do you divide out third party payroll liabilities in Quickbooks Online?