How do I set up my payroll so that the employer portion of taxes shows as both an expense under payroll expenses and a liability under payroll liabilities until it's paid

kking · ‎October 19, 2018

I know employee withholding is not an expense as it's already accounted for in the gross pay expense. That automatically posts to the correct payroll liabiliites account. The employer portion of the taxes posts as a payroll expense, which is also correct. BUT...when the 941 files it pays both the employee withholding AND the employer portion and posts as a reduction of my payroll liability, again just as it should. The only issue is that the employer portion never posts to the payroll liability account. Is there a way to AUTOMATICALLY have the expense posted to the liability account as well? Is this a manual entry I need to make each payperiod to post to the payroll tax liability account so it will show correctly on my balance sheet? Right now my balance sheet shows I've overpaid all my payroll taxes by the amount of my employer portion of taxes. How do I fix this?

john-pero · ‎October 19, 2018

If you set up payroll yourself then you would have to manually enter the expense debit and liability credit.

View solution in original post

john-pero · ‎October 19, 2018

If you set up payroll yourself then you would have to manually enter the expense debit and liability credit.

john-pero · ‎October 19, 2018

If you are using quickbooks payroll the employer portion should automatically post to the payroll liability account even though it is an expense. Sir Isaac Newton said for every action there is an opposite and equal reaction. In accounting this means double entry. For the employer share to post as an expense it also has to post somewhere else at same time. Look at those entries to see where they are going. Sounds like it is posting not where it should.

JonLee · ‎November 21, 2018

Perhaps this doesn't apply to this scenario, but using QB Enterprise 2015 plus all previous versions, ever since Payroll went out of sight, I simply entered my checks manually, entering the appropriate taxes. When I paid the appropriate vendors, liabilities automatically posted to their proper places. Are you saying that has been taken away in later versions?

JPShearer · ‎March 02, 2023

I am having the same issue. The employer portion of the IRA liability stopped showing in pay liabilities. It always was there before, but now I have to manually add it. What happened?

Kevin_C · ‎March 02, 2023

Thanks for joining this thread, JPShearer.

To get this sorted out, I recommend updating your tax table to the latest release. But beforehand, please make sure that your QBDT is up-to-date. This way, you'll always have the latest features and fixes. Then, refer to this article for more information on how you can check or download the latest tax table from the Employees menu: Get the latest tax table update in QuickBooks Desktop Payroll.

After ensuring you have the latest release and the issue persists, you'll want to Verify and Rebuild data tools to get this resolved to verify and resolve the most commonly known data issues within your company file.

Here's how to verify data:

Navigate to the File menu.
Choose Utilities, then select Verify Data.
Click OK when you see the message, QuickBooks detected no problem with your data.
If Verify finds an issue with your data, you'll be prompted to Rebuild Now or View Errors.
Click Close or View Errors and take note of the specific error message.

Next, here's how to rebuild the data:

Go to the File menu.
Choose Utilities, then select Rebuild Data.
Click OK if you receive a prompt to back up your company file.
Click OK when you get the message, Rebuild has completed, and proceed to the next step.
Run Rebuild Data again to make sure there are no errors.

However, if the issue continues, I recommend contacting our Technical Support Team. They have the tools to look into your account and verify what caused this issue.

Additionally, I've added these articles that'll help you learn more about setting up and managing payroll items in QuickBooks Desktop:

Feel free to comment down below if you have any other concerns or questions about managing your QBDT company. I'm always glad to help in any way I can. Keep safe!

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How do I set up my payroll so that the employer portion of taxes shows as both an expense under payroll expenses and a liability under payroll liabilities until it's paid