We use Gusto for payroll and Guideline for 401k, but do not offer matching yet. When Gusto runs payroll, it takes out the participant contribution and leaves that amount from their paychecks in our bank account. Then once the report/payroll is processed, Guideline pulls the participant money from our bank account. So it is employee money that is being held in our bank account, and that we are seeing as a deduction from the bank account, but it is not an expense on our end. Wondering what the best way to book is? Using QBO. Thanks!
I can share some information on how you book the 401K employee contribution via QuickBooks Online.
The best way to books the 401K employee contribution in QuickBooks Online is through a journal entry. This way you can record your payroll transactions from the Gusto.
Select the Plus icon (+) on the Toolbar.
Under Other, select Journal Entry.
Enter the transaction date in the Journal date field.
On the first distribution line, in the Accounts field, enter any account listed in the Chart of Accounts. Note: If you are not sure which account receives the debit and the credit side of a transaction, consult your accounting professional for guidance.
Enter the transaction amount in the Debits or Credits column. Tip: The first line is typically a Debit. Once you save the transaction, you can find it in the Recent Transactions report to see whether the Debit entry had the desired effect.
Specify a customer, vendor/vendor, or employee associated with the line, if any, in the Name field. Note: QuickBooks Online Plus users – When the Classes and Locations feature is turned on, additional fields for Location and Class appear.
Continue to enter distribution lines until the sum of the Debit column entries equals the sum of the Credit column entries. Note: QuickBooks Online Plus users – When the Classes and Locations feature is turned on, additional fields for Location and Class appear.
However, the assistance of an accountant is a must. Your accountant can help and guide on which account to debit and credit.