In QuickBooks Desktop Payroll, you can create a direct deposit offset item and add the item to a paycheck. The offset item is necessary for recreating direct deposit paychecks that have already been sent to the employees' accounts but are missing in the register. The following steps prevent doubling or overpaying your employees.
Create a direct deposit offset (DD Offset) payroll item:
- I n QuickBooks Desktop, go to Lists > Payroll Item List.
- Select the Payroll Item button in the lower left corner and select New.
- Select Custom Setup and select Next.
- Choose Deduction and select Next.
- Enter a name to be used for the DD Offset payroll item, e.g., "Direct Deposit Offset" and select Next.
- For Agency for employee-paid liabilities, leave the top two fields blank.
- In the Liability Account field, select Direct Deposit Liabilities. This is to offset the negative amount found in the Direct Deposit Liabilities account.
- Select Next.
- Set the Tax tracking type to None and select Next.
- Make sure there are no taxes selected and select Next.
- Set Calculate based on quantity to Neither and select Next.
- Set Gross vs. Net to net pay and select Next.
- Leave the Default Rate and Limit fields blank and select Finish.
QuickBooks Desktop Assisted Payroll
If you have Assisted Payroll and need to edit a paycheck that has already been submitted to Intuit, please contact us. See Recreate a voided or missing paycheck if you need to recreate a voided paycheck.
QuickBooks Desktop Enhanced Payroll
If you have Enhanced Payroll, follow the steps below to add the offset item to an existing paycheck
Note: When using a direct deposit offset deduction item, it is important to always enter the item below all other payroll items that appear in the Other Payroll Items field.
Add the Direct Deposit Offset item to an existing paycheck.
- Go to the Banking menu and select Use Register.
- Select the bank account used for direct deposit payroll.
- Double-click the paycheck you want to edit to bring up the picture of the check.
- Select the Paycheck Detail button to view the paycheck details.
- Select to clear the Use Direct Deposit checkbox.
- In the Other Payroll Items section:
- Select the first blank space (next available line) under the Item Name column.
- Select the drop-down arrow and select the Direct Deposit Offset item from the list.
If you get a warning message about Net Pay Locked, follow the prompt and unlock net pay to allow changes.
- In the Rate column, enter the amount equivalent to the Net Pay amount as a negative value.
- Select off of the Other Payroll Items field. The amount on the Net Pay field in the Employee Summary section will now show amount of 0 (zero).
- Select OK.
- Select Save & Close.
Clear the balance in your Payroll Liability Account for the Direct Deposit offset item.
When you used the Direct Deposit Offset item to zero out the net amount of paychecks, this created a positive balance in your payroll liability report. In order to clear this balance, you will need to do a manual adjustment so that it does not show the DD offset item amount as a payable liability.
To do this, follow the steps below:
- From top toolbar of QuickBooks, click Employees > Payroll Taxes and Liabilities > Adjust Payroll Liabilities.
- Date and Effective Date should match the date of the paycheck that you edited.
- In the Adjustment is for, select Company.
Note: Do not select to adjust the Employee, as this will make the Payroll Summary report incorrect.
- In the Item Name Column, select the DD Offset item you used on the paycheck.
- In the amount column enter the total amount of DD Offset as a negative value.
- Select Accounts Affected and select Do Not Affect Accounts.
- Select OK on Affect Accounts window.
- Select OK on Liability Adjustment window to save your entries.