Recording payroll in QuickBooks Online

As a workaround, you can use the journal entry function to manually record the accounting information for your payroll.

Below is an example of how to record a payroll journal entry transaction.

Example:

Fred's Residential Remodeling Company has five employees. For the Journal entry, you would take the gross pay for the employees. In this example, R4055.00 is the total amount.

1. Select + New.
2. Select  Journal entry.
3. Under Date, select the payroll payment(s) date.
4. (Optional) Input Entry # for journal entry.
5. Debit and Credit accounts:
   1. Debit expense account used to track gross wages. (R4,055.00)
   2. Debit expense account used to track Employer Contribution (e.g. pension scheme ). (R251.41)
   3. Credit Bank account payroll is deducted from. (R4306.41)
      Note: To make entry easier next time, the next two steps go over how to save the transaction. If you only wish to do the transaction once, or have the QuickBooks Online Simple Start version, please skip these steps.
6. Select Make recurring.
7. Enter a memorable Template name
   1. Type to Unscheduled; select Save Template.

Note: To access this template depending on the interface you see, go to the Gear Icon and select Recurring Transactions. Make sure to change amounts and/or accounts as necessary..

Using the same example, if the employer was responsible for paying the liability, the lines on the journal entry would go like this:

1. Debit expense account used to track gross wages. (R4,055.00)
2. Debit expense account used to track Employer Contribution (eg. pension scheme). (R251.41)
3. Debit expense account used to track Medicare. (R58.80)
4. Credit Liability account used for tracking payroll liabilities. (R1228.67)
5. Credit bank account used for processing payroll by net amount of the payroll payments. (R3136.54)

Now there is R1,228.67 sitting in a liability account waiting to be paid. When the cheques to pay the liability are written you would point the cheque to the liability account used in the journal entry. This will zero out the liability or lower it to the current amount outstanding.

This is a very basic example since no insurance or retirement was involved. For more complex payroll transactions, you should consult with your payroll service and/or accountant.