A payroll deduction that should have been cancelled was withheld from employees checks on one date, and then returned to the employee on the following pay period. Because it was initially withheld in May, and then returned to the employee in June, there is a payment showing due under Pay Taxes & Other Liabilities. I was advised to Adjust Payroll Liabilities. While the payroll item shows a zero balance when I run a report, it still shows due under Pay Taxes & Other Liabilities.
We perform liability adjustment to correct employees’ year-to-date or quarter-to-date payroll info. This includes company contributions, employee additions, and deductions. In doing this process, will have to make sure that it's affecting liability and expense accounts and the effective date is May. This way, we'll be able to enter an adjusting transaction in the liability and expense accounts on that period.
Here's how to check it:
Select Employees from the top menu bar.
Choose Employees Center, then go to the Transactions tab.
Select Liability Adjustments, then locate and open the appropriate adjustment.
Make sure that the adjustment is for the employee, the effective date is May, and the amount entered is negative.
Click the Accounts Affected button, then select Affect liability and expense accounts.
Select OK when you're done, then click OK again to confirm the changes.
Once done, we can run the Payroll Summary Report again and check the Pay Taxes & Other Liabilities section to make sure that everything looks right.