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tflood
Level 1

Payroll error - fixing it with a cash payment

I need to enter a payroll to correct last periods payroll for one employee.  Some of the employees hours were not entered.  To correct the payroll error quickly, we paid the employee cash that had not yet been deposited in our payroll account.  Now I have two things to fix, 1) enter the payroll hours to create a paycheck with correct taxes and, 2) create a cash on hand account (I think) to take the payment out of that account instead of the regular payroll account.   Will quickbooks let me do an unscheduled payroll for a period that we have already processed payroll for?

 

I use quickbooks desktop with enhanced payroll.

 

Solved
Best answer August 20, 2020

Best Answers
AlexV
QuickBooks Team

Payroll error - fixing it with a cash payment

Welcome to QuickBooks Community, tflood.

 

Yes, we can run an unscheduled payroll in QuickBooks Desktop. Let me show you how.

 

We need to create a Cash on Hand account first. You can follow these steps:

  1. Go to the Lists menu and select Chart of Accounts.
  2. Press Ctrl + N on your keyboard. Select Bank and click Continue.
  3. Name it as Cash on Hand and enter all the required details. Hit Save & Close.

Once done, we can now process a payroll. Simply go to the Employees menu, hover over Pay Employees. Then, select the Unscheduled Payroll. From the Bank Account drop-down, make sure to select the Cash on Hand account you've created.

 

You may also check this link on how to create a paycheck

 

I'm looking forward to assisting you again. Have a great day!

View solution in original post

JessT
QuickBooks Team

Payroll error - fixing it with a cash payment

Let me continue to help you out, tflood!

 

You're right. You can just create an unscheduled payroll and enter the unpaid number of hours, so QuickBooks will calculate the taxes. We call this as catch-up paycheck.

 

Just be sure to select your cash on hand account and remove the checkmark in the Use Direct Deposit checkbox on your employee's paycheck. That way, you can save the payroll without sending it to your employee's account.

 

 

About the posting of taxes, there's no need to create journal entries to transfer them from your cash on hand to the account you use when paying taxes. Actually, they are not really posted in your cash on hand account, but they are posted in your payroll liability accounts. Therefore, they will add up to your existing payroll liabilities, and you can pay them, like the usual way you make payroll tax payments.

 

We are available 24/7 to ensure we won't miss any additional questions you may have.

View solution in original post

5 Comments 5
AlexV
QuickBooks Team

Payroll error - fixing it with a cash payment

Welcome to QuickBooks Community, tflood.

 

Yes, we can run an unscheduled payroll in QuickBooks Desktop. Let me show you how.

 

We need to create a Cash on Hand account first. You can follow these steps:

  1. Go to the Lists menu and select Chart of Accounts.
  2. Press Ctrl + N on your keyboard. Select Bank and click Continue.
  3. Name it as Cash on Hand and enter all the required details. Hit Save & Close.

Once done, we can now process a payroll. Simply go to the Employees menu, hover over Pay Employees. Then, select the Unscheduled Payroll. From the Bank Account drop-down, make sure to select the Cash on Hand account you've created.

 

You may also check this link on how to create a paycheck

 

I'm looking forward to assisting you again. Have a great day!

View solution in original post

tflood
Level 1

Payroll error - fixing it with a cash payment

Alex,

Ok.  So, there is also the issue of payroll taxes.  That would also need to be paid.  I would have to do a J/E for that, transferring from cash on hand to a deposit in the payroll account for it to be in the payroll account at the time of the tax payment.  

 

Or, I could create a paycheck and do a draw for the amount that is already paid to the employee?  How would I list that on the paycheck deducting the 600 in cash we paid him, the allowing the balance due to him be paid via direct deposit (I think there is a small amount due, as my husband was trying to estimate how much the taxes would be).

 

JessT
QuickBooks Team

Payroll error - fixing it with a cash payment

Let me continue to help you out, tflood!

 

You're right. You can just create an unscheduled payroll and enter the unpaid number of hours, so QuickBooks will calculate the taxes. We call this as catch-up paycheck.

 

Just be sure to select your cash on hand account and remove the checkmark in the Use Direct Deposit checkbox on your employee's paycheck. That way, you can save the payroll without sending it to your employee's account.

 

 

About the posting of taxes, there's no need to create journal entries to transfer them from your cash on hand to the account you use when paying taxes. Actually, they are not really posted in your cash on hand account, but they are posted in your payroll liability accounts. Therefore, they will add up to your existing payroll liabilities, and you can pay them, like the usual way you make payroll tax payments.

 

We are available 24/7 to ensure we won't miss any additional questions you may have.

View solution in original post

Admin14600
Level 1

Payroll error - fixing it with a cash payment

What if you over paid an employee how to you adjust the payroll run?

ZackE
QuickBooks Team

Payroll error - fixing it with a cash payment

Welcome to the Community, Admin14600.

 

You can correct an overpayment by adding deduction items on your employee's paycheck to reduce their wages for the error.

 

Here's how:

  1. Create a deduction payroll item.
    • In your Liability account field, choose the same expense account that was used for their original compensation item.
    • Pick Compensation for its tax tracking type. This adjusts your year-to-date taxes that were withheld as a result of the overpayment.
    • If your employee was paid hourly, click Calculate this item based on Quantity. In the event they were paid with a salary item, select Neither.
  2. Add your new item to a paycheck with equal or more earnings than the amount that will be deducted.
    • Enter your overpayment amount. If the worker was paid hourly, use your Rate field to enter the rate that was used when they were overpaid. In the event they're paid salary, enter their amount that was overpaid.
    • If necessary, specify their hours. In the event they were paid hourly, enter the number of hours they were overpaid for in your Quantity field. If they were paid salary, leave the Quantity field blank.
  3. Finish creating their paycheck.

 

This process only affects the employee's gross amount, not their overpaid hours. Your year-to-date totals on payroll summary reports will still show these hours as having been worked. If sick and/or vacation accruals need to be updated, you'll also need to correct sick/vacation hours.

 

In the event an overpayment occurs on a termination check, you'll need to void and recreate it. Before you begin, make sure to collect the overpaid amount from your employee and that it's still in the current quarter. This will ensure you're not reporting less wages than what they received.

 

You'll additionally be able to find many detailed resources about using QuickBooks in our help article archives.
 

I'll be here to help if there's any questions. Enjoy the rest of your day!

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