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chris-tisdale
October 15, 2022
Question

How do I clear a payroll liability for an employee's personal expenses that was already deducted from his gross pay?

  • October 15, 2022
  • 1 reply
  • 0 views
The employee used a company credit for personal expenses and I added these as an after-tax payroll deduction.  The expenses were properly reflected in his net income, but there is still an unfulfilled payroll liability in the balance sheet.  

1 reply

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Archie_B
October 15, 2022

Thanks for joining the Community, chris-tisdale. I'll provide some information and guide you in clearing those payroll liabilities from your balance sheet.


As you pay payroll taxes, the amount shown on the balance sheet as a payroll liability will decrease.


That said, we can go to your Payroll Taxes page and pay those due liabilities to remove them from the balance sheet. 

 

Here's how: 

 

  1. Go to Taxes and choose Payroll Tax tab.
  2. Click Pay Taxes or the View all link.
  3. Find the taxes you want to pay, then hit Record Payment.

 

Also, you won't be able to pay recent payroll liabilities until they are due for the quarter. I've added this article for more details about paying your payroll taxes: Pay and file payroll taxes and forms in Online Payroll.

 

You can check this link and use it as a future reference: Year-end guide for QuickBooks Online.

 

I'll be available if you have any additional payroll concerns or questions. Let me know in the comments section. Take care.

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chris-tisdaleAuthor
October 15, 2022

Thanks for the reply but these expenses aren’t tax related. He simply used a company credit card for personal expenses so I deducted them from his gross pay (after tax deduction). I guess the journal entry would be to credit the associated expenses and then debit the payroll liability?  This would have the effect of negating the credit card expense and zeroing out the liability. 

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CharleneMaeF
October 15, 2022

Yes, chris-tisdale. Let's create a journal entry.

 

This way, the payroll liability will be cleared. Here's how:

 

  1. Go to + New and then select Journal entry.
  2. Add the correct accounts and the amounts.
  3. Check the amounts. You should have the same amount in the Credit column on one line and the Debit column on the other. 
  4. Click on Save and close.

 

As for the accounts affected, I recommend consulting an accountant to ensure your record is accurate. If you don't have one, you can use our Find-an-Accountant tool to look for an expert near you.

 

If you have follow-up questions or concerns about the process, don't hesitate to leave a comment on this thread. We want to make sure your record is accurate.

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