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Level 2

Which number of 401K should be booked in PL?

Regarding the payroll booking in quickbooks online plus, if I am not wrong, the number of gross pay, employer taxes and employer 401K contribution should be booked as part of the payroll expenses showing in PL. However, the number as 401K expenses booked in our PL is the total number of employee's contribution and employer's contribution. Since the number of employee's 401K is deducted from the gross pay same as the IRS and State taxes, the only number booked as the expnses in PL should be the portion of employer's contribution. If it is not correct, I appreciate if you can explain me about it showing the details of DrCr accounts. Thank you in advance!
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Best answer February 28, 2020

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Community Champion

Which number of 401K should be booked in PL?

You are correct that only Gross Wage plus employer taxes and contributions should be in gross payroll but take a closer look and what you might see is that every employee deduction is posted separately as is Net Pay.  I know it seems like a strange way to keep track of something so simple but this may be the case

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QuickBooks Team

Which number of 401K should be booked in PL?

Hello, @mina4. No worries, we'll have everything straightened out in no time!

 

As @john-pero stated, the information is correct. The Gross Wage plus Employer Taxes and Contributions should be in Gross Payroll.  Thanks for the helping hand, John!

 

Let's look further into your Payroll accounts in your QuickBooks Online and how they're mapped:

  1. Go to the Gear icon, then Payroll Settings.
  2. Under Preferences, click on Accounting.
  3. In the Other Liability & Asset Accounts section, look at how the employee's contributions are set up. This should be linked to a Liability account.

Here's a Community Article that provides more information on Payroll Preferences: Payroll accounting preferences.

 

Let me know if you have additional questions or concerns. Have a beautiful day.

View solution in original post

Highlighted
QuickBooks Team

Which number of 401K should be booked in PL?

It's our pleasure to help, @mina4.
 
An employer contribution can affect both your Payroll Liabilities and Expenses. To assign to the right account, I suggest reaching out to an accountant to get an advice after reviewing the posting of your paychecks. 

 

Here's more information on how to setup company contributions in Online Payroll: Set up company contributions

 

I'm always here if you need more help with your account.

 

 

 

 

View solution in original post

6 Comments
Highlighted
Community Champion

Which number of 401K should be booked in PL?

You are correct that only Gross Wage plus employer taxes and contributions should be in gross payroll but take a closer look and what you might see is that every employee deduction is posted separately as is Net Pay.  I know it seems like a strange way to keep track of something so simple but this may be the case

View solution in original post

Highlighted
QuickBooks Team

Which number of 401K should be booked in PL?

Hello, @mina4. No worries, we'll have everything straightened out in no time!

 

As @john-pero stated, the information is correct. The Gross Wage plus Employer Taxes and Contributions should be in Gross Payroll.  Thanks for the helping hand, John!

 

Let's look further into your Payroll accounts in your QuickBooks Online and how they're mapped:

  1. Go to the Gear icon, then Payroll Settings.
  2. Under Preferences, click on Accounting.
  3. In the Other Liability & Asset Accounts section, look at how the employee's contributions are set up. This should be linked to a Liability account.

Here's a Community Article that provides more information on Payroll Preferences: Payroll accounting preferences.

 

Let me know if you have additional questions or concerns. Have a beautiful day.

View solution in original post

Highlighted
Level 2

Which number of 401K should be booked in PL?

Hi John, 

 

Thank you for your advice! As you said, I double checked it but the wages number in PL were the ones of gross pay, not the ones net pay. And I found we did input the transaction in a false manner when we added 401K numbers through the "Banking" function which automatically comes the bank payment detail from the bank account. Anyway, I am happy to have a proper understanding of it.  

Highlighted
Level 2

Which number of 401K should be booked in PL?

Hi Ashley,

 

Thank you for teaching me such details about payroll settings!

I even didn't know about how the payroll accounts are mapped.

 

I see our employee contribution seems to set up correctly because it ties to "Payroll Liabilities (Payroll Tax Payable)" but the employer contribution (It seems called ADP, right?) also ties to "Payroll Liabilities" which is supposed to go to the payroll expenses. Should I change it?

 

  

 

Highlighted
QuickBooks Team

Which number of 401K should be booked in PL?

It's our pleasure to help, @mina4.
 
An employer contribution can affect both your Payroll Liabilities and Expenses. To assign to the right account, I suggest reaching out to an accountant to get an advice after reviewing the posting of your paychecks. 

 

Here's more information on how to setup company contributions in Online Payroll: Set up company contributions

 

I'm always here if you need more help with your account.

 

 

 

 

View solution in original post

Highlighted
Level 2

Which number of 401K should be booked in PL?

Thank you for sending me more information! I appreciate you showed more deitails.

I will investigate about it.  Thank you again!

 

 

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