Payroll Wages Account includes Gross Salary

Thanks for dropping by the Community, @Cafe Biz 618.

In QuickBooks Online (QBO), payroll wages will be posted on the expense account you've selected in the Payroll Settings. You can review it to check if you've assigned the correct account.

Here's how:

1. In QBO, go to the Gear icon at the top right to get to the Payroll Settings.
2. Click the Preferences tab at the top.
3. In the Wage Expense Accounts section, ensure you've chosen the correct Wage Account in the drop-down.
4. Review the other necessary information.
5. Hit OK to save.

For more insight about managing your current payroll preferences in QBO, consider checking out this article: Payroll accounting preferences.

Please let me know if you have any additional concerns or issues by leaving a comment in this thread. I'm always here to answer them. Have a great day!

Since the system automatically posts gross wages to the expense account.  Where do I post the net pay?

Hi there, @Cafe Biz 618

QuickBooks Online will automatically record the net wage amount directly to the bank account if you're using the Payroll service. However, if you're doing manual payroll, you can do a Journal posting. I'd be happy to show you how to enter it:

Here are the Accounts that needto be created in the Chart of Accounts:

• Payroll Expenses: Wages
• Payroll Expenses: Taxes
• Payroll Liabilities: Federal Taxes (941/944)
• Payroll Liabilities: Federal Unemployment (940)
• Payroll Liabilities: [State] SUI/ETT
• Payroll Liabilities: [State] PIT/SDI

Once done, create a Journal entry, and it should look like this:

I'd also recommend contacting your accountant to ensure that your books are accurate. Also, you can use this article to help you with the manual payroll entry process: Manually enter payroll paychecks in QuickBooks Online.

I'll be here if you have other questions. Please don't hesitate to let me know. Take care!

I'm having the same issue where my payroll is being recorded twice (gross plus net plus taxes). I use payroll through QBO and it records my gross pay as "Gross Pay - This is not legal pay" and it records my expenses from payroll shown from my bank account. This is making my expenses overstated. The suggestions made here have not solved my issue. How do I fix this?

Hi there, ammon.

Thank you for visiting the QuickBooks Community. I'll share some details on how to fix your payroll that is being recorded twice in QuickBooks.

When your Payroll service is set up, our system automatically creates default accounts to record your payroll liabilities and expenses. Then, the system distributes the amounts to its respective accounts. With this, all your payroll transactions depend on the account mapping set up in the Payroll preferences. I suggest reviewing it, and make the necessary edits. This is to ensure that you select the appropriate account for your payroll details. It's also where you can see which Expense and Liability accounts are affected when you create a paycheck, make a tax payment or create a deduction. 

Here's how:

1. Click the Gear icon.
2. Choose  Payroll Settings.
3. Go to the Accounting section and click the pencil icon to expand the page.
4. Review or edit the details being chosen and make sure that all information is correct.
5. Click Done.

For additional information, you can click this article: Payroll accounting preferences. 

Additionally, please refer to this article to view steps on how to set up commission as employee's salary or additional pay: Pay employees a commission.

If you have any more questions or concerns about your payroll entries, don't hesitate to comment below. I'm always here to assist you. Have a wonderful rest of your day!

Thanks ChistieAnn,

It looks like Paycheck and payroll tax payments was coming from a bank account that was not real. Now I'm trying to update accounting preferences for past transactions according to current preference settings, but it says it won't do this for the Bank Account section. How do I fix the past payroll payments so they come from my true bank account?

Hello ammon,

At this time, we'll have to take a look at your account so we can verify what causes the issue. That said, I'd recommend reaching out to our Phone Support team. 

You can contact them through this link: Contact Payroll Support.

Feel free to browse these references as your guide in paying employees:

• Manually enter payroll paychecks in QuickBooks Online
• Pay employees a commission

Keep me posted if there's anything that I can help with. Keep safe!

I am having this exact issue and am wondering if you found out more about why its categorized in this way and what actions you have taken or not taken. Thanks 

Im having the same issue! so Frustrating!

This isn't the kind of QuickBooks experience I want you to have, Jamie994. It's my priority to ensure this gets investigated and resolved.

If you've already performed all the possible steps to resolve the issue, I'd suggest contacting our QuickBooks Support Team. They're equipped with tools to determine the cause. It'll also allow them to submit a ticket to our engineering team to alert them about the issue if necessary.

Here's how:

1. Click the Help (?) icon.
2. On the Assistant tab, click Talk to a human.
3. Enter your concern in the Type something field, then click the send icon.
4. Select I still need a human.
5. Click Get help from a human.
6. You can either select the Chat with us or Have us call you option.

To ensure that you'll be assisted on time, please see our support hours.

Additionally, I've included an article that'll help you view useful information about your business and employees. This ensures you're able to keep track of the details that matter most to your business: Run Payroll Reports.

Please come back and keep us updated on how it goes, Jamie994. It's always our priority to get this resolved. 

I'm having the same issue and what they are saying to fix it doesn't work. I'm so frustrated!