When I use QuickBooks Payroll it automatically adds and categorizes the paychecks gross pay as "Wages" onto my Profit and Loss statement throwing it off when I add Net.

It's nice to see your post here. I got you, iDoc1600.

Our system automatically creates default accounts when your payroll service is configured to track your payroll responsibilities and expenses. Payroll wages will be posted on the expense account you've selected in the Payroll Settings. 

Since all your payroll transactions depend on the account mapping set up in the Payroll preferences, you'll want t review it. I also suggest seeking professional help from your accountant or bookkeeper for better ways on handling this.

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 payroll concerns or issues by leaving a comment in this thread. I'm always here to answer them. Have a great day!

Thank you for this detailed response, it was helpful!  After playing around with the Payroll Settings, it seems there is just no way to not have the gross wages automatically go onto the profit and loss statement and there is also no way to remove them from the statement.  So, I guess the workarounds are ignoring the net wages when reviewing transactions from my bank account or adding back in the gross wages to my bottom line.  If there is another way then I'd love to hear it!  Thank you!

Thank you for returning to thread, iDoc1600.

I'm here to add some information about the payroll data and how it appears in your Profit and loss report.

As my colleague previously mentioned, the flow of payroll data in your Profit and loss report is determined by the default account mapping and the type of transactions.

For Expense or Other Expense:

• Wage Expense
• Company Contribution
• Employer Taxes
• Payroll Expenses

For Other Current Liabilities:

• Payroll tax payable
  • Federal and state taxes
  • Local income taxes
• Payroll deductions
  • Health Insurance Premiums
  • Retirement Plans
  • Garnishment

Here's a link to a short video explaining the Profit & Loss report: Understanding Profit & Loss Statement: Income, Cost of Goods.

You can also learn how to personalize your financial reports to get more insights about your payroll wages: Customize reports in QuickBooks Online.

I'll be checking this thread if you still have other concerns about payroll wages and expenses. Take care and have a wonderful day!

I changed the "Wage Expense" account mapping to a liability account and it corrected my P&L so now only my net payroll (from Banking) and employer taxes hit my P&L. Had to create a manual JE for the years prior that were overstated...really really unhappy with intuit for not making this nuance known to all payroll users...likely have to refile taxes for multiple years