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.
What are Payroll Liabilities?
Payroll Liabilities are the amount that you don’t pay. It’s not a debt, but rather a liability. The liabilities include payroll taxes withheld from your employees and tracked on paychecks by using payroll items.
Examples of Payroll Liabilities:
- 401(k) contributions to retirement
- Union dues
- Health insurance contributions
- Garnishments used for child support
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?
- 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.
- Now click on the view/pay tab, which will open a liability check-up.
- 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.
- Now in the amount field, enter the negative value amount equal to the value of the liability.
- 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.
- 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.