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Community Contributor **

How to fix payroll error in QuickBooks Desktop?

Hello QuickBooks Desktop community,

I am seeking for some guidance on how to correct a payroll error that happen (2) payrolls ago. We have two employees with the same name and I accidentally switched their hours when I processed payroll, therefore, one of the employees was underpaid and the other was overpaid. With the employee that was underpaid, I immediately wrote a manual check according to the amount that our payroll company stated that we still owed him. However, for the employee that was overpaid, we were not able to collect the overpayment until this past payroll. I am aware that there are probably some adjustments to be made to both this employee's paycheck in QBks and payroll liabilities account in order to correct this error in QBks and, in order to, reconcile our bank account. Please provide me with a step-by-step guide to correct this error and be able to reconcile our bank account. Thank you in advance for your help - very much appreciate it!  

Solved
Best answer 05-17-2019

Accepted Solutions
QuickBooks Team

Re: How to fix payroll error in QuickBooks Desktop?

Hi @Stewart Engr,

 

You can create a journal entry so you can correct the balance of your checking account. I'm here to help you accomplish this.

 

To start with, the above troubleshooting steps shared by my colleague is to correctly record your taxes liability in QuickBooks.

 

Now, you'll have to contact first your payroll provider to confirm the amount you've overpaid to your employee.

 

Once done, you can create a Journal Entry to remove the overpaid amount in your checking account. Here's how:

  1. Go to Accountant.
  2. Select Make General Journal Entries.
  3. Enter the DATE and the ENTRY NO. of your journal entry.
  4. Choose your checking account and payroll account under ACCOUNT column.
  5. From the CREDIT column, enter the overpaid amount for your checking account.
  6. For the DEBIT column, enter the overpaid amount for your payroll account.
  7. Enter the name of your employee.
  8. Click Save & Close.

This way, you can correct the balance of your checking account and reconcile it from there.

 

In addition, here's an article you can read to learn more in creating a journal entry: Record a Journal Entry.

 

However, I'd still recommend contacting your accountant for further guidance in handling the amount you overpaid to your employee and also your reconciliation.

 

As always, you can visit our Help Articles page for QuickBooks Desktop if in case you need to learn some "How do I" steps.

 

It'll be always my pleasure to help if you have any other concern. I'm always around ready to help.

15 Comments
Moderator

Re: How to fix payroll error in QuickBooks Desktop?

We're glad to have you here, AcctnAsst.

 

Thanks for joining the Community. Let's work together and go through your payroll concern one at a time.

 

Since you wrote a check for the underpaid employee, I suggest deleting it and creating a manual paycheck. This is to let QuickBooks Desktop calculate the liabilities that should be withheld. Before doing so, please create a backup copy of your company file.

 

Then, follow these steps to create an unscheduled paycheck and enter the net pay, so the system calculates the gross amount:

  1. Click on Employees.
  2. Choose Payroll Center.
  3. Click on Start Unscheduled Payroll.
  4. Set the Pay Period Ends and Check Date fields.
  5. Choose the employee that was underpaid.
  6. Select the Handwrite & Assign check numbers radio and enter the number.
  7. Click on Open Paycheck Detail.
  8. Mark to select the Enter net/Calculate gross checkbox.
  9. Enter the amount in the Check Amount field.
  10. Click on Save & Close.

For visual reference, I've attached some screenshots below.

 

1.PNG

 

2.PNG

 

3.PNG

 

4.PNG

You can also check out this article for further guidance: Gross up a paycheck in QuickBooks Desktop Payroll.

 

On the other hand, let's create a deduction item and enter it on the payroll of the employee in question. Here's how:

  1. Go to List.
  2. Choose Payroll Item List.
  3. Click on the Payroll Item drop down.
  4. Choose New.
  5. Select Custom Setup (allows editing of all settings; recommended for expert users) and click on Next.
  6. Choose the Deduction (Union Dues, 401(k) deferral, Simple IRA, HSA) radio button and click on Next.
  7. Enter the name of the deduction item and click on Next.
  8. Set the Agency for employee-paid liability window and click on Next. The, select None as the Tax tracking type.
  9. Click on Next until the Gross vs. net window. Then, choose the net pay radio button and click on Next.
  10. Click on Finish.

I'm attaching some screenshots to help you with creating the item.

 

1.1.PNG

 

1.2.PNG

 

1.3.PNG

 

1.4.PNG

 

That should do it. Please let me know if you have further questions. I'll get them answered for you.

Community Contributor **

Re: How to fix payroll error in QuickBooks Desktop?

Hi JaneD, 

Thank you for providing me with this step-by-step guide. However, when I go in to the Payroll Center I do not show a "start unscheduled payroll button. Please see the photo enclosed. 

 

Please note: our company does not actually use Intuit's payroll service to process payroll. We use a third-party payroll service company. We only use Intuit's payroll service for faster recording-keeping purposes rather than entering our payroll information manual. 

Community Contributor **

Re: How to fix payroll error in QuickBooks Desktop?

Hi JaneD, 

Thank you for providing me with this step-by-step guide. However, when I go in to the Payroll Center I do not show a "start unscheduled payroll button. Please see the photo enclosed. 

 

Please note: our company does not actually use Intuit's payroll service to process payroll. We use a third-party payroll service company. We only use Intuit's payroll service for faster recording-keeping purposes rather than entering our payroll information manually.

Screenshot.png

QuickBooks Team

Re: How to fix payroll error in QuickBooks Desktop?

Hello there, @AcctnAsst.

 

I'm here to join the thread and help you handle your transactions/payroll correctly.


The reason why you don't have the Start Unscheduled Payroll option/button under the Pay Employees page is that you don't have the scheduled payroll created yet.c5 unscheduled.PNG

 

On the other hand, if you've created the check inside QuickBooks, then, I suggest following the steps provided by my colleague JaneD above. This helps ensure that the taxes are accurate on the form. To continue with the process, you just have to click on the Pay Employees button beside Start Scheduled Payroll.c5 pay emp.PNG

 

For more information about creating paychecks in QuickBooks Desktop Payroll, you may check this article: Create paychecks.

 

Please don't hesitate to add a comment below if you have any other QuickBooks or payroll questions, I'll be around to help you. Have a great day ahead!

Community Contributor **

Re: How to fix payroll error in QuickBooks Desktop?

Hello JaneD & Angelyn_T,

Thank you for explaining and showing me start an unscheduled payroll. After I began the unscheduled payroll, I went back to follow JaneD's step-by-step guide but I could not get passed step 8 ("mark to select the enter net/calculate gross gross"). When I check the box I get the following message - please see screenshot enclosed. Please explain or show me how I may bypass this message. Thank you!

QuickBooks Team

Re: How to fix payroll error in QuickBooks Desktop?

Thank you for the response, @AcctnAsst!

 

You'll have to select only one payroll item for your paycheck. I'm here to share a few insights and help you from there.

 

To start with, the prompt message will appear once you've selected more than one payroll item in your Earnings table.

 

With this, you can only proceed once you select either Bonus or Annual Salary of your payroll item.

 

For your reference, please see attached screenshot below.

 

Capture35.PNG

 

In addition, you can follow the detailed steps outlined by my colleague, @JaneD, so you can successfully create your paycheck.

 

Also, if there a need for you to enter another payroll item in your Earnings table, you can enter it when you create your next payroll.

 

Lastly, you can check this helpful article for your future reference: Who have I Paid this Month?

 

It'll be always my pleasure to help if you have any other questions. I'll be keeping an eye for your response.

Community Contributor **

Re: How to fix payroll error in QuickBooks Desktop?

Hello @JonpriL,

Thank you for chiming in and providing me with your insight-- very much appreciated. However, the prompt message appears before I am able to choose a payroll item. Further, the employee in question is paid on a hourly basis not salary. I believe choosing the bonus item is inadequate for this matter. 

 

Hello @JaneD and @Angelyn_T,

I just realized that you may have not received my responses because I did not mention you in my responses. I still have not been able to resolve my error. 

Community Contributor **

Re: How to fix payroll error in QuickBooks Desktop?

Hello @JonpriL

Thank you for chiming in and providing me with your insight -- very much appreciated. However, the prompt message appears before I am able to choose a payroll item as you suggested or enter an amount as @Angelyn_T suggested, as well. Further, this employee is paid hourly not salary. 

 

Hello @JaneD and @Angelyn_T

I just realized that you may have not received my responses since I did not mentioned you in the appropriate response. I still have not been able to solve this matter. 

QuickBooks Team

Re: How to fix payroll error in QuickBooks Desktop?

Glad to hear again from you, @AcctnAsst.

 

Let me to share some information to resolve the error in your payroll records.

 

First, for your underpaid employee, we can temporary create a Salary type net to gross check to calculate the employee's correct wage and payroll taxes. Once you have the correct figures, don't save the net to gross check nor create an unscheduled payroll check since it will duplicate the manual paycheck you've already process. Instead, let's record a YTD.

 

Here's how:

  1. Click the Help menu.
  2. Choose About QuickBooks .
  3. Press Ctrl + Alt +Y on your keyboard, then click on Next.
  4. In the Employee Summary Information window, select the employee that was underpaid.
  5. Double-click on the employee's name.
    1. In the YTD Adjustment window, select hourly wage as the pay type.
    2. Enter the figures and hours from the temporary Net-To-Gross check.
    3. Type in the tax amount.
    4. Click on Account Affected button.
      • If the manual paycheck is already recorded in your register, choose Affect Liability and Expense account but not the bank account.
      • If the manual paycheck is not yet recorded on your bank register, select Affect liability, expense and bank accounts.
    5. Click Ok.
  6. Review the YTD Adjustment details.
  7. Click Ok.

On the other hand, the most convenient way to resolve the overpayment made to your employee is to deduct it on the next payroll. Just inform the employee ahead of time.

 

Keep in touch with me here in the Community if you have other questions about managing your employees payroll information. I'm just a few post away.

Community Contributor **

Re: How to fix payroll error in QuickBooks Desktop?

Hello @juVielL 

Thank you for taking the time to respond to my query. Please advise how I can solve this matter as easy and convenient to move on from this. 

QuickBooks Team

Re: How to fix payroll error in QuickBooks Desktop?

Hello there, AcctnAsst.

 

Allow me to step in and provide some additional information on how to handle and resolve the payroll error you experience in QuickBooks Desktop.

 

You have two options to correct this. You can either manually calculate the gross wages or create a new Salary Item intended for the underpaid employee. Since you can only use a Salary Item when you select the Enter net/Calculate gross option, you may need to create a new Salary Item as an alternative. 

 

To create a new Salary Item, you can follow the steps below:

  1. Go to the Lists menu.
  2. Choose Payroll Item List.
  3. From the Payroll Item drop-down, choose New.
  4. Select Custom Setup. Then Next.
  5. Select Wage. Then  Next.
  6. Select Annual Salary. Then Next.
  7. Select the type of pay. Vacation Pay and Sick Pay are each specific options. All other types of pay should be entered as Regular Pay.
  8. Select Next and follow the onscreen instructions.
  9. Click Finish.

Once done, you can start creating payroll for the underpaid employee and use the newly created Salary Item, then enter the amount you paid for the employee.

 

I'm adding this article as your reference on how to set up a Salary payroll item: Set up a yearly salary payroll item.

 

If you choose manually calculate the gross wages in QuickBooks Desktop, here's an article that provides a detailed: Calculate gross wages.

 

That's it. You should be all set. Never hesitate to get back to me if you need further assistance while working with this. It's always my pleasure to help.

Community Contributor **

Re: How to fix payroll error in QuickBooks Desktop?

@Charies_M

Thank you for providing me with your expertise. I would like to manually calculate the underpaid employee's wages. However, I am now wondering if its truly necessary to follow all these steps I have been provided by you and your other colleagues since the amount that was owed to the employee was around $33 with some change. Our payroll company gave me this amount. 

QuickBooks Team

Re: How to fix payroll error in QuickBooks Desktop?

Hello there, @AcctnAsst.

 

I can provide additional information on how recording your payroll-related expenses works in QuickBooks.

 

To ensure payroll taxes and wage gross amounts are accurate when filling your returns, you can follow the steps provided above. However, since you're using a Third-party payroll services, you can write a check and choose Payroll Expenses account for accounting and bookkeeping purposes.

 

Here's how to write check:

  1. Click the Banking Menu.
  2. Choose Write Checks.
  3. Enter the name of the employee and the amount.
  4. In the Expenses Account section, choose Payroll Expenses account. 
  5. Type in the description of the transaction.
  6. Click Save and Close

Let me know if you have other questions about tracking your expenses in QuickBooks. I'm here to help.

Community Contributor **

Re: How to fix payroll error in QuickBooks Desktop?

Hi @juVielL,

Thank you again for getting back to me. This is what I had initially done but I was advised by one of your team members to delete the check and following the steps in the first response when I published the post. 

My other concern is why do I still show the amount that we overpaid the other employee when I attempt to reconcile our checking account if the employee already paid us back through a deduction on their paycheck. Do you think you can help me with this as well?

QuickBooks Team

Re: How to fix payroll error in QuickBooks Desktop?

Hi @Stewart Engr,

 

You can create a journal entry so you can correct the balance of your checking account. I'm here to help you accomplish this.

 

To start with, the above troubleshooting steps shared by my colleague is to correctly record your taxes liability in QuickBooks.

 

Now, you'll have to contact first your payroll provider to confirm the amount you've overpaid to your employee.

 

Once done, you can create a Journal Entry to remove the overpaid amount in your checking account. Here's how:

  1. Go to Accountant.
  2. Select Make General Journal Entries.
  3. Enter the DATE and the ENTRY NO. of your journal entry.
  4. Choose your checking account and payroll account under ACCOUNT column.
  5. From the CREDIT column, enter the overpaid amount for your checking account.
  6. For the DEBIT column, enter the overpaid amount for your payroll account.
  7. Enter the name of your employee.
  8. Click Save & Close.

This way, you can correct the balance of your checking account and reconcile it from there.

 

In addition, here's an article you can read to learn more in creating a journal entry: Record a Journal Entry.

 

However, I'd still recommend contacting your accountant for further guidance in handling the amount you overpaid to your employee and also your reconciliation.

 

As always, you can visit our Help Articles page for QuickBooks Desktop if in case you need to learn some "How do I" steps.

 

It'll be always my pleasure to help if you have any other concern. I'm always around ready to help.