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Record Additional Payroll Tax Liability Payments in QuickBooks

Record Additional Payroll Tax Liability Payments in QuickBooks

You might find it challenging to maintain control over the complicated nature of payroll processing. It’s crucial to keep track of your payroll liabilities and submit payments on time. Payroll liabilities are made when there are unpaid wages or payroll deductions. Let’s start with the fundamentals. 

An organization’s processes like hiring, calculating compensation, monitoring attendance, and administering benefits are managed by QuickBooks Payroll, a feature of the accounting software. In it, payroll taxes for the federal and state governments are subtracted after determining employee earnings. In small businesses, payroll aids in the management of human resources and employees. In addition to enabling users to manage and control their company’s payroll, QuickBooks Payroll helps users meet their business requirements. It can be challenging and time-saving to use QuickBooks Payroll.

The Financial Accounting software that drives the market is QuickBooks. Accounting purposes are served by comprehensive accounting software. Users can run their businesses more easily with the aid of QuickBooks. Integral tools like tracking expenses, viewing bank statements, dragging invoices, etc. are available with QuickBooks. 

The recording of employee payments is a part of the process known as payroll accounting. Payroll accounting frequently includes wages, incentives, salaries, commissions, overtime pay, etc. The legal framework of the nation has a significant impact on how the payroll is calculated.

How does payroll work? 

  • All employees’ paperwork should be complete and current.
  • Construct a payroll schedule.
  • Determine the gross pay for each of your employees.
  • (Salaries, Hourly Pay, and Extra Time).
  • deductions from social security, taxes, health insurance, etc.
  • Pay your workers.
  • Maintain a payment log. 

What exactly are payroll liabilities?

A liability in accounting is the commitment to make a payment. Your business has two different payroll obligations when you manage payroll:

  • Payroll liabilities are the gross wages owed to employees and independent contractors.
  • Amounts withheld: Amounts withheld from employee pay for income taxes must be sent to the IRS and state departments of revenue. Payroll liabilities are sums that have been withheld but have not yet been sent. 
  • However, keep in mind that money withheld from an employee by a company is not considered a payroll expense.
  • Payroll costs: Some payroll obligations are not deducted from employees’ salaries. For instance, when payroll is processed, the employer’s portion of Social Security and Medicare taxes becomes a liability. The liability is changed to an expense account when the payments are made.
  • You include reports that describe the payments’ purpose when you submit payments (employee name, amounts withheld, etc.). There could be dozens of balance-sheet account numbers in your company’s payroll-liabilities chart of accounts. 

Types of payroll liabilities: 

Payroll liabilities are created by employee compensation, taxes, and voluntarily made deductions. Employers also have payroll liabilities for FICA (Federal Insurance Contribution Act) tax and other costs.

Payroll liabilities are the sum of the gross wages owed to workers and independent contractors. Liability for a particular pay period can be determined in a variety of ways:

  • The portion of annual salary due for the pay period, plus bonuses and other incentive payments.
  • This liability equals the total number of hours worked multiplied by the hourly wage, including overtime hours. Additionally, hourly employees may receive incentive pay.
  • Amounts owed to independent contractors (freelancers) are determined by a flat fee or an hourly rate contract.

When paying independent contractors, no taxes are deducted. The information the employee provides on Form W-4, however, determines the amount of taxes you must deduct from their pay. 

Voluntary deductions: 

Payroll withholding is used to pay for benefit programs like health insurance, retirement plans, and other insurance premiums. Payroll expenses represent the employer’s portion of the costs.

  • Contributions are made by the employee and are not covered by the employer. But the employer’s portion of the contributions counts as a payroll expense.
  • Premiums for health, dental, vision, and life insurance: Employer-paid premiums are not deducted from employees’ paychecks and are counted as business expenses. The employee’s portion of premiums is taken out of pay; it is not a payroll expense.
  • Dues are taken out of wages and sent to the union on the employee’s behalf.

The amount deducted from a worker’s pay to repay an employer loan is not a payroll liability or payroll expense. The payment instead decreases a loan-receivable (asset) account and increases the employer’s cash account. 

Payroll liabilities vs. payroll expenses

Every business must use the accrual method of accounting, which balances revenue received with expenses incurred, to record payroll liabilities and payroll costs. Regardless of when the costs are paid in cash, the accrual method records payroll expenses in the month they are incurred. A more accurate representation of company profit is provided by the matching concept. 

How to create a custom tax payment:

  • Navigate to the Employees menu.
  • Select Payroll Center, then click the Pay Liabilities tab.
  • Select Create Custom Payments from the Other Activities section.
  • Decide on the right payment date.
  • Choose the taxes you want to pay.
  • To finish the process, click Create and then adhere to the on-screen directions.

How to pay payroll liabilities? 

The most typical payroll liabilities and how they are paid are listed below:

  • Employees receive their gross wages via check or direct deposit.
  • Federal income taxes: Businesses report and submit their federal tax withholdings using Form 941.
  • FICA (Medicare and Social Security taxes): Companies report and submit these tax payments using Form 941.
  • These payments are reported and submitted using Form 940, the employer’s yearly federal unemployment (FUTA) tax return.

To pay all payroll liabilities, take the following actions:

  • Gather employee information for Form W-4 (for employees).
  • Utilize a worker’s contract, hourly data, or salary to determine gross wages.
  • Calculate the necessary deductions, if any.
  • Pay each employee’s net pay after deductions are made.
  • Payroll liabilities for sums that will be spent on business expenses should be recorded. For instance, the employer’s portion of FICA taxes.
  • Use the appropriate reporting form to submit the appropriate amounts to each third party.
  • Payroll liability balances should be reclassified as payroll expense accounts.

How to Record Payroll Taxes in QuickBooks? 

To record payroll taxes in QuickBooks, follow the steps outlined below. By using these steps, you can record payroll taxes in QuickBooks with ease. If, for any reason, you don’t want to read the instructions and follow them, speak with a QuickBooks ProAdvisor.

1. Keep payroll tax records for (Prior Tax Period)

  • Open and configure QuickBooks.
  • Choose Tax under New.
  • Choose Payroll Tax.
  • Choose and input your previous tax history.
  • Simply select Add Payment.
  • meet the requirements (payments information, etc.)
  • Hit on, good! 

2. Keep payroll tax records for (Current Due)

  • Open and configure QuickBooks.
  • Choose Tax under New.
  • Choose Payroll Tax.
  • Then select Pay Taxes.
  • Decide to record the payment. In Pay Takes
  • Dates for Payment:
  • Select Other.
  • Date, please. (Date of Payment)
  • Enter the Cheque Number.
  • Then select “Approve.”
  • Also, print.

3. Confirm the Payroll Taxes You Recorded:

  • Select Payroll Report under New.
  • On Manage Payroll, click.
  • Choose the Payroll Tax Payments Report option.
  • Verify Your Payroll Taxes Have Been Recorded. 

Record payroll liabilities paid with a credit card: 

Discover how to enter tax payments made with a credit card in QuickBooks Desktop Payroll.

You can use a credit card to pay your tax debt to both federal and state agencies. Depending on the agency, you can make a payment over the phone or online. In QuickBooks Desktop, these credit card payments can be entered.

There are two ways to record credit card payroll liability payments in QuickBooks Desktop.

Method 1: Record payments through a pass-through account.

This technique uses a new bank account as a pass-through account and is a one-time operation.

Step 1 is to open a new bank account.

  • Choose Chart of Accounts from Lists by going there.
  • Choose Account from the menu below, then pick New.
  • Select Bank, then click Continue.
  • In the account name field, type “Pass-Through Account.”
  • After leaving the remaining fields empty, click Save & Close.
  • If prompted to configure a bank feed, choose No.

Step 2: Creating a custom liability payment:

  • Select Create Custom Payments under Payroll Taxes & Liabilities under Employees.
  • Choose a date range, then click OK in the Select Date Range For Liabilities window.
  • The To Be Printed box must be unchecked.
  • The pass-through account you created in Step 1 should be selected under Bank Account.
  • Pick from the list of payroll liabilities that were paid with a credit card. then choose to Create.
  • After that, click Banking and then choose Enter Credit Card Charges.
  • Choose the date that the payment was made.
  • Go to the Expenses tab.
  • Choose the created pass-through account in Step 1 under the Account heading.
  • Enter the exact sum that was paid with a credit card under the Amount field.
  • If there is a reference number, type it in under Memo. You can also enter the payroll liability.
  • To save and close, select.

Method 2: Write a check with a value of 0 in the bank account where the payroll liabilities are kept 

Liabilities must be chosen for a single payee. You must repeat these steps for each payee if you have multiple payees.

  • Follow the above instructions again for steps 1 through 3.
  • Select the bank account that is used to pay payroll liabilities under Bank Account.
  • Select the Expenses tab in the Liability check window.
  • The credit card account can be chosen from the list under the Account.
  • Put a negative amount next to the credit card payment you made in the Amount field.
  • After choosing Recalculate, choose Save & Close.

How to Record Payroll Taxes in QuickBooks Online? 

Using QuickBooks Online (QBO) Payroll’s Enter Prior Tax History feature, you can manually record another or additional payroll tax payment (state unemployment). In the Tax Type field and when choosing the dates for the liability period, you must be sure to choose the right state unemployment name. The second tax payment will be properly recorded if you do it this way.

We would suggest performing a few troubleshooting steps first, though, before proceeding. You can then narrow down any potential browser problems with this. To get started, you can use a private browser to sign into your QuickBooks Online (QBO) account (incognito). As an example:

  • Type “Ctrl + Shift + N” (Google Chrome)
  • Shift + Ctrl + P (Firefox)
  • Option + P + Control (Safari)

To manually record the payroll tax payment after signing in, go to the Taxes menu’s Payroll Tax tab. Here are the steps in detail:

  • Navigate to the Taxes menu.
  • Choosing the Payroll Tax tab.
  • Select Enter Previous Tax History from the Taxes column menu.
  • selecting the Add Payment button.
  • Fill out every field required for the second tax payment.
  • Choose OK.

Clear the cache and cookies in your default browser if it worked. Older files that interfere with viewing and performance will be removed, refreshing the system.


1. Does QuickBooks calculate payroll taxes automatically?

Yes, this feature is offered by QuickBooks Payroll. The payroll data and transactions that you enter into QuickBooks are used to calculate taxes and payroll. A Detail Review Report is useful.

2. What Payroll functions are related to Payroll Taxes?

1. The payroll tax forms are filled out for you by QuickBooks Payroll.
2. Federal and state payroll taxes are calculated automatically by QuickBooks Payroll.
3. Payroll taxes can be paid electronically right from QuickBooks.
4. Employees can be paid via direct deposit or check.

3. In QuickBooks, how do I view my tax payments?

Find the tax payment you made to the tax department under “For Review.” QuickBooks will advise you to match the transactions if the date and tax payment amount you entered in QuickBooks match the tax payment downloaded from the bank.

4. How can tax payments be tracked and compared to the ban?

How to keep track of tax payments and compare them to b… The business owner owes taxes to taxing authorities in the form of VAT or service tax, which he or she pays to those authorities. By going to Tax Centre, we can record these tax payments in QuickBooks.

5. In QuickBooks, how do I record payroll tax?

Set Payroll Tax Records for (Prior Tax Period) Open and configure QuickBooks. Choose Tax under New. Choose Payroll Tax. Choose and input your previous tax history. Simply select Add Payment. Hit on, good! 2. Keep payroll tax records for (Current Due) Open and configure QuickBooks. Choose Tax under New. Choose Payroll Tax. Then select Pay Taxes. Decide to record the payment.

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