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C
Childcare Owner
January 3, 2024
Question

Childcare payroll deducation

  • January 3, 2024
  • 1 reply
  • 0 views

Hi there,

I am the owner of a small childcare facility and  we give our employees a 50% discount on their own children. Most of our employees would rather have that amount taken out of their checks (after taxes, of course), but after setting this up I see it as a liability on my balance sheet.

Did I set it up incorrectly?  How do I move this amount into our general account?

Thank you for any help you can provide.

 

1 reply

Bryan_M
Bryan_M
January 3, 2024

Thanks for coming here, @Childcare Owner.

 

Let me share insights about the childcare payroll deduction you set up and help you move the amount to your general account.

 

In QuickBooks Online (QBO) payroll, setting up any deductions or contributions will automatically fall to the liability account since this is how its system works. However, we can move the amount into the general account by performing a Journal Entry (JE). 

 

Here's how:

 

  1. Click the + New.
  2. Select Journal entry option from the Other column,
  3. On the first line, select an account from the Account field. Depending on if you need to debit or credit the account, enter the amount in the correct column.
  4. On the next line, select the other account you're moving money to or from. Depending on if you entered a debit or credit on the first line, enter the same amount in the opposite column.
  5. Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
  6. Enter information in the memo section to know why you made the journal entry.
  7. Choose Save and new or Save and close.

 

Check out this article for more info: Create journal entries in QuickBooks Online.

 

You might want to change your company's bank account for payroll. Feel free to read this article: Change your payroll bank account.

 

If you have additional questions about managing your deductions, click the click button below. I'll be willing to lend a hand. Keep safe and have a good one.

C
Childcare OwnerAuthor
January 3, 2024

Thank you so much for your response.  I am not sure which to put as a credit and which to put as a debit.  If I debit the childcare liability account and credit the bank account it actually shows up as an expense in the account ledger.  Shouldn't it be a deposit?  Since the money was already paid to the employee and then the childcare money was set aside and should be credited to the bank account?

When I switch it and put the childcare liability as a credit and the bank account as a debit it doubles the amount of the liability account.

I'm assuming the correct way would be the way that causes the liability account to zero out, but I'm confused as to why it takes the amount out of the checking account and doesn't deposit it into the checking account.

Thanks for your help!

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