Thanks for posting to the Community, @rjwbailey.
Currently, we're unable to use a liability account to be credited with employee's net pay. Instead, you can create a clearing account for payroll since QuickBooks only allows you to select a bank account.
Here's how:
- Sign in to your QuickBooks account and go to Accounting on the left-side panel.
- Select Chart of Accounts.
- On the Chart of Accounts screen, click the New tab.
- Choose Bank for the Account Type. You may choose any detail type you want for your clearing account.
- Type in the Name for the clearing account.
- Make sure you do not type in any amount in the balance before clicking Save and Close.
That said, when you finish running payroll, you can then create a journal entry (JE) to transfer the balance to the liability account (director's loan). I'd recommend consulting an accountant if you need help in assigning accounts in JE.
Additionally, you can reference this article for the lists of the specific payroll reports: Run payroll reports.
Please feel free to comment below if you have more questions. I'll be around to help. Stay safe and well!
