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QuickBooks Payroll Adjustment

QuickBooks Payroll Adjustment

QuickBooks payroll adjustment basically requires when your payroll liability report shows an incorrect amount. By adjusting your payroll liabilities, you can rectify such problems. Here are the complete guidelines for the same.

How To Adjust QuickBooks Payroll In Case The Liabilities Are Wrong?

QuickBooks Payroll is an easy and affordable solution for business owners of all industries. The software helps in accurate, easy, and on-time payment to the employees. With QuickBooks, it becomes easy for you to adjust payment issues with their employees efficiently and accurately. You can also create endless paychecks during tax automation payroll tax calculations.

The users face issues while using this tool. But the best part of QuickBooks Payroll software is that it comes with live support from top payroll experts. One of the problems that the Payroll software users face is – forgetting to change the rate of unemployment tax while having a fixed rate in the payroll item, and it appears to be computing correctly for each new paycheck, but how do fix the prior computed amounts?

Here are some common reasons why we use liability adjustments:

  • Fix payroll item or company contribution item with incorrect tax tracking type
  • Correct YTD salary, deduction amount, or excess amount for an employee
  • Change the amount to match company contribution items, such as an HSA or 401(k) company match

Adjusting payroll liabilities can be difficult. If you are not sure what steps to take, always consult an accountant/tax consultant for assistance.

If you want in-depth information about How To Fix Payroll Liabilities in QuickBooks check out the latest post.

The QuickBooks Payroll Customer Service will instantly provide the solution to you. You need to follow certain steps for adjusting state unemployment tax, or payroll liability.

  • Once you find out the differences related to your Payroll liabilities, you can record an adjustment with the help of the Liability Adjustment feature in QuickBooks payroll.
  • Adjustments can be made that affect both liability and expense accounts, or which do not affect accounts. These adjustments can also be implemented for employee-specific liabilities or company liabilities.
  • When the total value is calculated and the category of adjustment, you can mention the amount that signifies an employee or company liability; also you can prefer to adjust the account balances.
  • When you start to update your payroll liability account, QuickBooks applications begin to adjust the proper liability accounts and notify you to mention the account to balance the entry.

QuickBooks Payroll adjustments – Follow the below-listed steps:

  • Start the Adjust Payroll Liabilities window -> by going to the Payroll Taxes and Liabilities -> under the Employees Menu
  • Mention the actual date of the transaction and it is not necessary to communicate the effective date of the Adjustment
  • Choose the Effective Date of the Adjustment
  • In case the adjustment makes a difference to a single employee-related liability -> Choose the employee from going to the employee field
  • And in case of adjustment makes no difference to an employee other than the company paid liability -> Choose the company option
  • Choose the correct payroll liability component within the Payroll Item column of the Taxes and Liabilities section of the Adjust Payroll Liabilities window
  • Mention the amount of the adjustment. A negative (-) amount signifies the decrease of the amount of any payroll liability, and a positive (+) amount signifies the increase in the amount of any payroll liability
  • You can enter a notation in the Memo column to describe the reason for the adjustment in case it is required
  • Click the Accounts Affected -> select the appropriate option -> not affect accounts or Affect liability and expense accounts
  • Click OK to save your entries

Adjusting Payroll Liabilities In The Company File

To adjust payroll liabilities in QuickBooks Desktop:

Adjustment for the Company

  • First of all, open the QuickBooks Desktop application dashboard and click on the Employees tab, then select Payroll Taxes and Liabilities.
  • After that, select Adjust Payroll Liabilities and choose the date on which you want the adjustment.
  • Then, you need to choose the Effective Date for the adjustment.
  • For the segment, you need to select the company under the Adjustment.
  • After that, you need to select the adjustment item from the Item Name drop-down list.
  • Now, Here you need to enter the negative amount which you have paid for adjustment.
  • Then, add your explanation in the memo section for the transaction.
  • Click on the Accounts Affected button.
  • Now, here you need to choose Affect Liability and Expense Accounts or Do Not Affect Accounts.
  • Then, click OK on the effect accounts screen, then click OK again to save the adjustment.

Adjustment for the Employee

  • Follow steps 1 to 3 from the “Adjust your Company” method above.
  • Choose “Employee” under the Adjustment for the segment.
  • Click the employee’s name from the drop-down list for whom you want to make the adjustment.
  • Select the payroll item for adjustment from the Taxes and Liabilities section, then enter the negative amount.
  • Follow steps 7 to 11 as mentioned in the “Adjustment for the Company” method to save the changes.


How to adjust payroll liabilities in quickbooks online?

  1. Click on the “Taxes” tab on the left-hand menu and then select “Payroll Tax.”
  2. Choose the “Adjustments” tab and then click “Add Adjustment.”
  3. Enter the date for the adjustment and the account where the adjustment will be recorded.
  4. Enter the amount of the adjustment and the reason for the adjustment. You can also attach any necessary documents or notes.
  5. Choose the employee or group of employees that the adjustment applies to.
  6. Save the adjustment by clicking on “Save and Close.”

How to adjust unemployment payment in QuickBooks?

To adjust an unemployment payment in QuickBooks:

  1. Go to the “Employees” menu and select “Payroll Taxes and Liabilities,” 
  2. Then click on “Adjust Payment.” 
  3. Enter the adjustment amount and reason, then click “OK.”
  1. What are different methods available for QuickBooks Payroll Liabilities Adjustment?

    You can easily do the adjustment as per your requirements or according to your error:

    💠 Update QB to the most recent released version 
    💠 Recreate voided or deleted paycheck 
    💠 Fix incorrect paid via dates 
    💠 Ensure that QB verifies and rebuilds data utility.

  2. Why do we need to adjust the payroll liability?

    There are lots of reasons behind the payroll liability adjustment. A few of them include:

    💠 You fixed the wrong tracking type of tax for the Health Insurance company contribution set up
    💠 If you have made the corrections in the additions, YTD wages, or deductions. This is for the employee who is not going to receive more paychecks. 
    💠 In the case of company contribution items, the amount that is changed. These items include HSA or 401K.

  3. How do I enter Payroll Liabilities Adjustment in QuickBooks?

    The very first, open your employee’s paycheck transaction. Next, hit the button named Paycheck Detail. Choose the Unlock net pay. After that, change the amount for employers for a specific payroll item. Finally, save your transaction.

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