Employer Payroll Tax Expense Account

Zoe1 · ‎December 12, 2017

I'm using QBO and running payroll - the Employer Taxes are being added to an expense account automatically. I'm not using QBO to actually pay the taxes, so when I enter a payroll tax payment it is also going into Payrol Tax expense account. I know I'll have to adjust the liability account at the end of the year, but it seems like something is incorrect here. Currently the expense account just shows double (at least) the payroll taxes, because there's nothing counter-acting the QBO entry for employer payroll taxes.

In my experience QB Desktop did NOT automatically add this expense for me - can someone help me smooth this out?

lynda · ‎December 12, 2017

If you are using qb payroll, why are you not creating the payroll liabilities thru the program? If you did that (it is part of the Enhanced module), they clear your liability accts. for you when the payment is created. I would delete your manual checks and create liability payments (re-reconcile the ones that you deleted).

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lynda · ‎December 12, 2017

If you are using qb payroll, why are you not creating the payroll liabilities thru the program? If you did that (it is part of the Enhanced module), they clear your liability accts. for you when the payment is created. I would delete your manual checks and create liability payments (re-reconcile the ones that you deleted).

Zoe1 · ‎December 18, 2017

Hi Lynda,

I have that setup with another account and have had SO much trouble getting the payroll liabilities module to work that I would really prefer not to go there with this account. I do not want to use QBO to actually pay the payroll taxes with either account, and it seems like the program has a lot of trouble allowing you to input tax payments made outside the program. I've read all the instructions here, and just have not had a good experience. Do you have any recommendations for the situation without switching to that method? Should I just create a journal entry to negate the auto entries for employer taxes?

lynda · ‎December 18, 2017

I have not ever had a problem with the payroll tax payments in QBO payroll. But if you want to pay them on your own, I would contact the service and let them know. They should be able to let you pay by check.

Desktop Qb Payroll allows for more versatile with payments. The manual way of doing payroll (using a payroll calculator) might’ve the way to go. You can use journal entries and checks to enter payroll.

Anonymous · ‎September 06, 2019

since moving to QB Online, we have had nothing but trouble with payroll. the first time we tried to play with it, it failed and we had to re-enter all employees manually and use a paper check. The second time it sent out the paychecks but has doubled the payroll expense and therefore the payroll liability. All three payrolls in August were distributed into two accounts. One has the net amount of the paychecks in an account I did not set up in the chart of accounts called "wages" and the other sent the gross information to payroll liabilities. Both are in my P&L showing double the payroll expense and also sending a statement to my boss to pay a tax liability of double the amount actually owed. I have spoken to tech's but no one can tell me which transactions to delete so that I don't mess everything up. Is there a way to tell me which transactions are false??? wage or payroll liabilities?? I have to get this report correct today and there is no one in the office that has a clue.

IamjuViel · ‎September 06, 2019

I appreciate the complete details about your concern, @Caroleann.

Let’s first review your payroll accounting preferences and generate your payroll summary report. Once completed, let’s compare the payroll items and the accounts associated with them. This will ensure that the data reflected on your Profit and Loss report are accurate.

To start with, when you turn on your payroll subscription, QuickBooks

automatically creates default posting accounts in your chart of account.

This income and expense accounts are associated with your payroll items. Also, these are the same accounts listed in your Profit and Loss

report.

Here’s how to view your accounting preferences:

Go to the Gear Icon.
Choose Payroll Settings.
Select the Preferences tab.
Click the Accounting Preferences link.
Review the posting accounts assigned to your payroll expenses and liabilities.

To run the Payroll Summary report, here’s how:

Click the Reports menu.
Scroll down to the Payroll section.
Choose Payroll Summary report.

From here, you can compare the total wage and tax amount for both Profit and Loss report and Payroll Summary report. It should reflect the same amount.

As for your payroll liabilities, it will not be reflected in the Profit and Loss report. You can run and compare the Payroll Tax and Wage Summary report and the Payroll Liability report.

Just make sure to choose the same date range when comparing two or more reports. By doing so, you’ll get matching and accurate data.

Alternately, I’d recommend consulting with an accountant so you’ll be guided accurately in mapping your payroll-related income, expenses, and liabilities.

To learn more on how to manage payroll, you read through these articles:

Feel free to drop your comments below if you have other questions. I’m always here to help.

Deveron · ‎September 15, 2021

I have to end the payroll service for my employee. But I still owed unemployment tax for the employee. I have a notice on qb but there is no bill so i cant pay onling at the DOL

AlexV · ‎September 15, 2021

Hi Deveron!

Thanks for posting here. Allow me to assist you with the unemployment tax.

The Federal Unemployment Tax Act (FUTA) tax is an annual tax which means you need to pay it once a year unless you reached the threshold of $500. Only the state unemployment taxes are due at the end of every quarter.

QuickBooks Online Payroll won't allow you to pay the unemployment tax if they aren't due yet. You'll want to process the payment outside the system, then simply record it on your QuickBooks. Here's how to record it:

Go to the Taxes menu and select Payroll tax.
From the Payment resources section, click Prior tax history.
Click Add payment and enter the details of the unemployment tax payment you've made.
Tap OK to save it.

Ideally, from the Payroll tax page, you'll see if the tax liability is due already. Also, you can only process the payment electronically if your E-Pay is activated.

I've added some links you can check. These will explain more on how to settle your taxes and forms in QuickBooks Online:

Also, here are your references on how to cancel and reactivate your payroll service:

Keep on posting here if you need more help. We'll assist you!

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Employer Payroll Tax Expense Account