How can you Adjust Payroll Liabilities in QuickBooks?


If your payroll liabilities balance is incorrect at the year-end in the balance sheet, you may have to correct it to get the correct year to date figure. Adjustment of payroll liabilities should be done by yourself only if you are well versed with accounting rules or, with the help of your accountant. And if you have assisted payroll plans or QuickBooks online payroll, then you can directly contact our QuickBooks help team to make the adjustment.

Reasons for the Need of Adjustment in Payroll Liabilities

Some reasons due to which your payroll liabilities balance may need adjustments are as follows:

  • Health Insurance company contribution set up with incorrect tax type.
  • Correction of YTD wages, deduction, and contribution for the employees, who will not receive any Paychecks in the future.
  • For correcting the contribution amount of Health savings plan or 401 (K) plan.

Steps to Adjust the Payroll Liabilities in the Balance Sheet of QuickBooks

  1. First of all, you need to find the payroll discrepancy area by running the Payroll Check-up and Payroll Summary report.
  2. In this step, you need to actually adjust your payroll liability by following the below sub-steps:
    1. You need to Go to the Employees > Payroll Taxes and liabilities > Adjust payroll liabilities.
    2. Now complete the required fields like paycheck dates, is the adjustment for employees or company, etc.
    3. In this step, you need to select the employee and complete the Tax and liabilities fields: choose the item name > enter amount of adjustment > select Affected account > click on OK.
  3. In this step, you should run the Payroll summary report again to check whether the payroll liabilities are showing an updated balance or not.

Learn to Delete Payroll Liabilities in QuickBooks


What should be included in Payroll liabilities?

Wages earned but not yet received, tax withheld from the employees, Payroll related costs are the few components of the payroll liabilities.

My Payroll liabilities data is not reflecting in the QuickBooks, what should I do?

First, you should check if they are set up to correct account, if they are posted in the current liabilities account, they will not show under payroll liabilities head. If the error still persists, there can be data damage issues that can be resolved with the help of rebuilding data functionality.

Why do my Payroll liabilities show a negative balance?

The negative amount generally means tax overpayment, which may be due to incorrect tax rate, or deletion of Paycheck after the tax payment.

How do I void Payroll liabilities in QuickBooks?

Go to Employees menu > select Edit/Void Paycheck > select the check-in Question and select Void and then click on Yes and select Void again.

How can I view Payroll liabilities in QuickBooks?

Go to Report > Employees and Payroll> Payroll liability Balances. Now, click on a customized report, select date range, and click on View

Is it possible to reverse payroll in QuickBooks?

You can do so, if you voided the Paycheck after payroll processing began, you can ask for Direct deposit reversal, if it falls under the Intuit guidelines.

Post Written by

Daniel Tough is a Content expert @ with over 7 years of experience who writes blogs on Accounting & Accounting Softwares. He’s an organizer for SEO Meetup & SEO Conference. Daniel regularly writes informative articles on Accounting & Accounting Software integration with various third-party apps.

Leave a Comment

Disclaimer: We have experienced CPAs providing the quality solutions of QuickBooks for many years. Content available on our website is solely our property, and for any feedback contact our team via LIVE CHAT or Contact form. We are not associated with any other company like Intuit and work with our own T&C.

Enquire Here Chat Now