QuickBooks is a bookkeeping software that offers a payroll service to its users. When using payroll, you might have come across the term payroll liabilities. Payroll liabilities are the different amounts a business needs to pay but are currently unpaid or withheld by the business. Even the taxes withheld by the employer are considered payroll liabilities till they are paid to the federal tax department. The payroll liabilities should be timely released and minimized as much as possible. High payroll liabilities can be bad for the health of your business. This blog explains the importance of payroll liabilities and a procedure to Adjust Payroll Liabilities in QuickBooks. Read the blog further to know more.
Our QB support team is always present for your help at 1.855.738.2784.
About Payroll Liabilities
If you use the payroll service in QuickBooks, you might be aware that a specific amount is deducted from the employee’s wages for tax filing purposes, and there are certain benefits to employees provided by the employer. These benefits include Medicare expenses, retirement plans, etc., which the employer manages. Until this amount is paid to the designated receiver, it is considered payroll liabilities. QuickBooks creates a payroll liabilities account for every user when they start using payroll services. It records all the amounts to be paid, like payroll taxes, employee wages, etc., and the amount keeps increasing until the amounts are released. Once you pay your payroll liabilities, the amount is reduced from the payroll liabilities accounts. QuickBooks always recommends paying your liabilities using payroll liabilities checks. These checks can be created in the Pay Payroll Liabilities window and help precisely monitor both the paid & due amounts.
You may read also : QuickBooks Error 9999
Procedure to Adjust Payroll Liabilities
First of all, run a payroll check-up if you want the payroll data of the previous year, set the date and time accordingly.
You can find the Payroll summary report for the month or quarter you need to make the adjustments for. Pay attention to the amount of payroll items that require adjustments.
You can adjust your payroll liability in case you find any data discrepancy. After you have found out the payroll item that needs adjustment, follow the steps below-
- Click on Employees and select Payroll taxes & liabilities.
- Click on Adjust Payroll Liabilities, and in the Dates and Effective Date fields, enter the date you sent your Paycheck in the affected month.
- Go to the Adjustment is for field and select
- Employee Adjustment if the payroll item you are trying to adjust was paid by the company and then select the employee name.
- Company Adjustment if you want to make corrections in the amount from the payroll center and the Payroll Liabilities Balance report.
- Go to the Item Name column and choose the payroll item you need to adjust.
- Now, enter the Amount needed for adjustment.
- If the withheld amount is less- Add a positive amount to increase for adjustment
- If the withheld amount is more- Add a negative amount to decrease for adjustment
- Under Memo, you can add a brief description to clarify the adjustment.
- Click on Accounts Affected and tap Ok.
- Select Do not affect accounts if you don’t want alterations in the Liabilities & expense accounts. However, the changes will be reflected in YTD(Year to date) amounts in the payroll reports.
- Select Affect Liabilities & expense accounts if you want to add the adjustment in the accounts.
- Repeat these steps for all the employees that need adjustments and click Ok.
The Payroll Liabilities will be adjusted and updated after using the procedure.
Closure
This is the end of our blog; we explained why you should Adjust Payroll Liabilities in QuickBooks and the procedure along with it. We hope the blog was informational, and you are now aware of the details of payroll liabilities.
If you have any more queries, feel free to contact our QB support team at 1.855.738.2784.
The blog is posted on setuppost.com