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Change your accounting preferences in QuickBooks Online Payroll

SOLVEDby QuickBooksQuickBooks Online700Updated 1 day ago

Learn how to manage your payroll accounting settings to track your payroll transactions.

You can customize how you track your payroll wages, taxes, deductions and company contributions in your chart of accounts to meet your accounting needs.

We’ll show you how to change or update your payroll accounting settings.

Note: If you're using Core, Premium, or Elite payroll without accounting turned on, check out Export your payroll data into QuickBooks to manage your payroll accounting settings.

Step 1: Determine what account type to use for your payroll transactions

QuickBooks Online Payroll automatically creates default accounts where your payroll liabilities and expenses are recorded. But if you prefer to record it in a different register or account, you can add a new one in your QuickBooks Online Chart of Accounts.

Note that for payroll expenses and liabilities, QuickBooks won't allow you to use a different account type such as Cost of goods sold.

Not sure what payroll account type to use? Here are the different payroll account types you can use to track your payroll transactions.

Use this account type for:

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

Use this account type for:

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

Step 2: Add or edit your payroll account register

Edit the existing account if you simply want to change the type or name. Or add a new account if you prefer to use a different one for a specific payroll item. 

Follow the steps below to add or edit a payroll account. If you already have the account you want to use, skip to step 3.

  1. Go to Settings ⚙, then Chart of accounts.
  2. Select New  to add a new one. Or search for the account you want to edit, then select Edit from the View register ▼ dropdown.
    Note: if you see the New category window instead of the Account window, you’re creating a subaccount. If you need to create a new parent account, switch to accountant view.
  3. From the Account Type ▼ dropdown, choose Expenses or Other Current Liabilities.
  4. Depending on the account type you selected, choose a Detail type.
  5. Add or rename the account name in the Name field.

Step 3: Update your payroll accounting preferences

Now it’s time  to update your payroll accounting preferences. 

Follow the steps below to update your payroll accounting settings.

  1. Go to Settings ⚙, then Payroll settings.
  2. Select Edit ✎ next to Accounting. 
  3. Select Edit ✎ to update a specific section.
  4. Choose which account the transaction of the specific payroll item should go. Then select Continue.

To change past transactions:

  1. Select Edit ✎ next to Want to update existing transactions.
    If you receive an error "There are too many transactions to update all at once." Reduce the amount of months, weeks, or days in the period going back from today's date. For example, if you were trying to go from 10/20/2022 to 1/1/2022, reduce your look back period to 10/20/2022 to 5/1/2022.
    If you still receive the same error, further reduce the lookback period, for example 10/20/2022 to 10/1/2022.
  2. Add a Start Date. We'll change all accounts except in the Bank Account section.

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