Senior Explorer **
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I think my payroll liabilities might be out of whack

I just took over for our book keeper.  We have a payroll bank account.  At month's end, it should zero out, unless I'm looking at this wrong.  I transfer gross amount of check into payroll account.  Then print out checks for employee for net amount.  The taxes/insurance remain in payroll account.  Once a month I go online and pay the taxes/insurance which deducts from this account.  I try to do this on the first, or even last day of month.  When I run "custom summary report" it shows a negative net gain for the exact amount that I paid for taxes and insurance.  Payroll deductions are set up as liabilities.  When I pay the taxes online, I then create an entry in the register for the paid amount.  Am I doing this right? The report just seems to mess up.  Thanks.

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QuickBooks Team
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Re: I think my payroll liabilities might be out of whack

Hi there, @Chadster,

 

Thanks for joining our forums and checking this with us today. I can share some information about your liability payments in QuickBooks Desktop.

 

Before anything else, I'd like to ask a few questions to make sure I'm on the same page with you. May I know how do you pay your taxes in QuickBooks? Is it through writing checks or creating a liability check? The way you record your payments will affect how it is posted on your bank.

 

In the meantime, since QuickBooks is unable to capture taxes paid outside the software, you'll need to record them manually in QuickBooks using a liability check. This process relieves the balance on your Payroll Liabilities at the same time pull the payment out of your bank account.

 

Here's how to create a liability check.

  1. Go to the Employees menu and click Payroll Taxes and Liabilities.
  2. Choose Pay Scheduled Liabilities.
  3. On the Pay Taxes & Other Liabilities window, click the tax liability you'd like to pay then select View/Pay.
  4. Check the payment information then click the Check radio button to avoid duplicate submission of your payment.
  5. Hit Save & Close.

Once you're done recording the payment, check the register if it still shows a negative net gain. I would also appreciate if you can send me a screenshot of the discrepancy. This will help me isolate the issue and provide the most accurate resolution to you.

 

Please let me know how it goes in the comment section below. I'll be on a lookout for your response on this, @Chadster. Thanks for your time today! 

Senior Explorer **
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Re: I think my payroll liabilities might be out of whack

Thanks, this helped tremendously.  I did have one kink though.  When we take out insurance, we also have it set up as a payroll liability.  However, when I go to "pay liabilities" only the taxes show up as an option to pay.  So, how I got around this, was to create a check to the insurance company, then at the drop down box at the bottom, I clicked on the "payroll liabilities" option.  It then told me to pay the liability, and then it gave me the option to do so.  Not sure why it doesn't show up with the taxes, but oh well.  If anybody has another way to do this that might be simpler, I'm all ears.  But thanks for the info.

QuickBooks Team
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Re: I think my payroll liabilities might be out of whack

I appreciate you sharing the workaround you've discovered, @Chadster

 

Talking about @Jen_D's suggestion, have you already added a payment frequency? I'm thinking that this could be the reason why the taxes didn't calculate.

 

Also, I've tried a few things here on my end and found another workaround which is simpler and easier to perform. Let me discuss this in details and help you get things to fall into place. 

 

Let's add the payment schedule for your insurance item so you'll be able to see this on the Pay Liabilities tab. Here's how: 

 

  1. Go to the Employees menu at the top, then select Payroll Center
  2. Choose Pay Liabilities
  3. From the Other Activities list at the bottom, choose Change Payment Method to open the QuickBooks Payroll Setup.
  4. Click Continue
  5. Choose Edit on the Review your Benefits and Other Payments window. 
  6. Make sure to select the correct Payee, Account # and Payment Frequency.
  7. Select Finish.AddPaymentSchedule1.PNG
  8. Choose the bank account where you want to track the scheduled tax payment in the software. 
  9. Choose Continue until you can click Finish Later.

 

This will do it. For more information about this process, you can check out this article: Set Up and Pay Scheduled Payroll Liabilities

 

I'm here anytime you have other payroll concerns. Have a great day.