Zero Out Payroll Liabilities in QuickBooks

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Payroll liabilities are nothing but the amount you owe to your employees, but it is not yet paid. The payroll liabilities also include payroll taxes that you as a business owner have withheld from the employees. In this article, we will look into the process of zero out the payroll liabilities in QuickBooks after payment and also some frequently asked questions on the related topics and sub-topics.

Why zero out the payroll liabilities in QuickBooks?

All the payroll liabilities related to the amount needs to be zero out finally since it should be paid. If net compensation paid to the employee reconciles with net compensation calculated in the payroll and wages payable should be zero out instead.

How to Zero out payroll liabilities in QuickBooks?

  1. First of all, you need to go to the Payroll center> and put a checkmark against payroll liability for which payment was already made through check/cash.
  2. Now click on the view/pay tab, which will open a liability check-up.
  3. In this click on expense> go to the account dropdown menu > and select the expense account that you chose at the time of recording the payment.
  4. Now in the amount field, enter the negative value amount equal to the value of the liability.
  5. Click on recalculate, which will make the payroll liabilities amount zero and then save and close to finish up.

Hopefully, the above process would give you clarity on zeroing out payroll liabilities in QuickBooks. Nevertheless, we should also look into some questions (FAQ) from the users to clear any further doubts.

FAQs

You need to click on Employees> Employee and payroll> select payroll liability balance from the dropdown menu. Enter a refund check or manual bank deposit as the case may be.
Click on the Payroll center and select the ‘Pay liabilities’ tab from the drop-down menu and then click on Adjust Payroll liabilities, now you just need to click on the ‘Previous’ button till you get your liabilities adjusted or deleted.
You will have to follow below steps:
  • First, print out your payroll register.
  • Match employees’ time cards to pay register.
  • Verify pay rates, salaries, deductions on paychecks.
  • Post entries in general ledger matching to your payroll register.
You need to go to the Pay liabilities tab> now click on transactions from the payment history screen. Now click delete from the top of the screen and press ok delete the payment.
This may be due to the tax overpayment due to incorrect tax rate, it is one of the most common reasons for a negative amount in payroll liabilities.
You can do so by request a direct deposit reversal, but it should be allowed as per the Intuit guidelines.

Post Written by

Steve Hale is a Content expert and Executive Editor with over 15 years of experience who writes original blogs on Bookkeeping. Hale writes optimized content for a range of clients about SEO, Bookkeeping, Quickbooks & Accounting. He was formerly the managing editor who used to oversee all aspects of the publication.

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