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Change your accounting preferences in QuickBooks Online Payroll

SOLVEDby QuickBooks901Updated 4 hours ago

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

You can customize how you track your payroll wages, taxes, deductions, and company contributions to 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 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 to your QuickBooks Online Chart of Accounts.

Not sure what payroll account to use? Consult your accountant before making changes to accounts as this may affect your reports such as your Profit and Loss or Balance Sheet.

Here are the different payroll account types you can use to track your payroll transactions.

  • Other Current Liabilities
  • Expenses and Other Expenses
  • Cost of Goods Sold
  • Other Current Assets (Reimbursements only)
  • Bank (Reimbursements only)
  • Other Current Liabilities
  • Expenses and Other Expenses
  • Cost of Goods Sold
  • Other Current Liabilities
  • Expenses and Other Expenses
  • Cost of Goods Sold (Tax Expenses only)
  • Other Current Liabilities
  • Expenses and Other Expenses
  • Other Current Assets (Advance and Loan repayments only)
  • Other Assets (Advance and Loan repayments only)

Step 2: Add or edit your payroll account register

Edit the existing account if you 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

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. Enter the name of the account, or scroll to choose which account the transactions should go to.
  5. Select Save then Done.

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.

Note: If your payroll transactions don't end up in the correct accounts, check if you use account numbers in your chart of accounts. You may need to turn it off:

  1. Go to Settings ⚙, then Account and settings.
  2. Select Advanced.
  3. From Chart of accounts, select Edit ✎.
  4. Select Enable account numbers slide button to turn it off.
  5. Select Save, then Done.

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