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You are correct that only Gross Wage plus employer taxes and contributions should be in gross payroll but take a closer look and what you might see is that every employee deduction is posted separately as is Net Pay. I know it seems like a strange way to keep track of something so simple but this may be the case
Hello, @mina4. No worries, we'll have everything straightened out in no time!
As @john-pero stated, the information is correct. The Gross Wage plus Employer Taxes and Contributions should be in Gross Payroll. Thanks for the helping hand, John!
Let's look further into your Payroll accounts in your QuickBooks Online and how they're mapped:
- Go to the Gear icon, then Payroll Settings.
- Under Preferences, click on Accounting.
- In the Other Liability & Asset Accounts section, look at how the employee's contributions are set up. This should be linked to a Liability account.
Here's a Community Article that provides more information on Payroll Preferences: Payroll accounting preferences.
Let me know if you have additional questions or concerns. Have a beautiful day.
Thank you for your advice! As you said, I double checked it but the wages number in PL were the ones of gross pay, not the ones net pay. And I found we did input the transaction in a false manner when we added 401K numbers through the "Banking" function which automatically comes the bank payment detail from the bank account. Anyway, I am happy to have a proper understanding of it.
Thank you for teaching me such details about payroll settings!
I even didn't know about how the payroll accounts are mapped.
I see our employee contribution seems to set up correctly because it ties to "Payroll Liabilities (Payroll Tax Payable)" but the employer contribution (It seems called ADP, right?) also ties to "Payroll Liabilities" which is supposed to go to the payroll expenses. Should I change it?
It's our pleasure to help, @mina4.
An employer contribution can affect both your Payroll Liabilities and Expenses. To assign to the right account, I suggest reaching out to an accountant to get an advice after reviewing the posting of your paychecks.
Here's more information on how to setup company contributions in Online Payroll: Set up company contributions.
I'm always here if you need more help with your account.