Nowadays, QuickBooks payroll liabilities are a crucial part of businesses and these should be accounted for in the proper way in every pay period. It is the company’s obligation which they have to pay. These cannot be delayed or neglected. QuickBooks is a useful accounting software in which you can adjust payroll liabilities in QuickBooks.
So in this blog, you will get detailed information about QuickBooks payroll liabilities as well as steps to adjust your liabilities in the QuickBooks application.
What are Payroll Liabilities and Why do you Adjust them?
The amount that is owned by a business owner to their employee, but still has not paid yet is known as Payroll Liabilities. For instance, employee wages, tips, bonuses, payroll taxes, etc.
Incorrect payroll liabilities can be rectified by making some adjustments. The reasons for this adjustment are as follows:
- To make corrections in employee’s YTD or year-to-date taxes, deduction items, and wages. It is for terminated employees who will not get any paychecks.
- When there are changes in the amount that is contributed by the company, for example, 401(k) or HSA.
- When payroll items like Health Insurance Company contributions get fixed with the wrong tax tracking type.
How Do You Adjust Payroll Liabilities in QuickBooks?
As an employer, you can adjust payroll liabilities in QuickBooks which gets updated on the employee’s T4 form. It can be done by following these steps:
Step 1:- Check Differences in Payroll
- You need to run a payroll check-up.
- Verify your existing setup by scanning your payroll data.
- You must have to review your payroll setup.
- After that, you should have to create a payroll summary report to make adjustments regarding the amount on the payroll item.
Step 2:- How to Adjust Your Payroll Liabilities in QuickBooks
- Go to the Employees option, then click on Payroll Taxes and Liabilities.
- Now, select Adjust Payroll Liabilities.
- Click on the Date field, now enter the date on which you want to make adjustments. QuickBooks Desktop will automatically fill in today’s date, so you need to enter the date.
- After entering the date, now select the Effective Date field, where you can enter the date to affect your liability balance. QB Desktop will calculate the amount on your TPZ-1015, PD7A by using this date on the payroll liability balances report.
- You can correct your employee’s YTD information by selecting the option Employee Adjustment and then choosing the name of your employee.
- Go to the Taxes and Liabilities section and select the current payroll item from the Item Name column.
- Now you can enter the amount that you want to adjust. By entering a negative amount it will decrease the amount of liability. Whereas, by entering a positive amount, it will increase the amount of liability.
- You also can select the option Income Subject to Tax column to enter the amount. This option is to make a wage-based adjustment.
- You can make a note about the adjustment for your reference by clicking on Memo.
- Now select the option Accounts Affected, there are two options:
- If you choose Do not affect accounts, this option will keep the balance unchanged for the liability and expense accounts.
- If you select Affect liability and expense accounts, the transaction will be reflected in these accounts.
- Now click on the OK option and this will close the Affect Accounts window.
- If you want to enter an adjustment for an additional employee then you can select the option Next Adjustment.
Step 3: Check Updated Liabilities
You can check whether liabilities are updated or not in the following ways:-
- Now run the payroll summary report to recheck for accuracy.
- Run the payroll liability balances report to check the amount that has to be paid is correct.
Step 4: Edit Payroll Liabilities Check
This step is optional, in this step, you can update or correct the liabilities check before paying any liabilities.
- Firstly, navigate the banking from the top menu bar and choose the Use Register option.
- Select the register you want for the payroll liabilities and click on OK.
- Select edit liability check by right-clicking on the Liability check.
- After that, make sure that the changes are updated.
- Lastly, click on the save and then close.
Conclusion
In conclusion, if you want to make any corrections regarding your employee’s wages and items you make changes by adjusting payroll liabilities QuickBooks. All information is explained in detail which is followed by simple steps. I hope after reading this blog, you have got your answers to adjust payroll liabilities in QuickBooks.
Read More Related Articles:
