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terryalize
December 8, 2021
Question

How should I enter the previous ADP Payroll into Quickbooks?

  • December 8, 2021
  • 2 replies
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I am a new QB Bookkeeper and just got my first client. They previously used ADP to pay employees but stopped after a few months. They are now looking to use QB for their payroll services. I am a bit confused as to how I can enter the previous payroll into QB. Which accounts should use in the journal entries for Federal Income Tax, Social Security, Medicare, State Income Tax, and State Disability Insurance. Would these be considered expense accounts or liability accounts? Also would they be debits or credits? This is what I have so far.

2 replies

RenjolynC
RenjolynC
December 8, 2021

I'm glad to see you in the Community, terryalize.

 

I'll share some of the accounts used for manually adding payroll in QuickBooks Online. 

 

Please keep in mind that recording journal entries require an understanding of debits and credits. If you have specific questions regarding the payroll accounts, I recommend reaching out to your accountant or find a ProAdvisor.

 

As for the screenshot, it looks like you have already added some of the payroll expenses and liabilities.

 

Here are the list of account you need to create for tracking the payroll:

 

  • Payroll Expenses: Wages
  • Payroll Expenses: Taxes
  • Payroll Liabilities: Federal Taxes (941/944)
  • Payroll Liabilities: Federal Unemployment (940)
  • Payroll Liabilities: [State] SUI/ETT
  • Payroll Liabilities: [State] PIT/SDI

When creating the journal entry, please make sure to use the info from your client's payroll report. If they paid multiple employees for the pay period, you can combine all of their paycheck totals into one journal entry. Otherwise, create separate journal entries for each employee if you need to break out the details.

 

Here's how:

 

  1. On the first line, select Payroll Expenses: Wages and enter the amount as a debit.
  2. On the second line, add the Payroll Expenses: Taxes account and enter the amount as a debit. Note: You can combine the following taxes into one debit, or add each tax item as separate debits: Social Security Employer, FUTA Employer, Medicare Employer, State Job training taxes and State unemployment insurance.

  3. Add taxes paid towards 941 or 944 taxes on the third line and choose Payroll Liabilities: Federal Taxes (941/944) for the account. Then, enter the amount as a credit. Note: You can combine the following taxes into one debit, or add each tax item as separate debits: Federal Income taxes, Social Security Employee, Social Security for Employer, Medicare for Employee, and Medicare for Employer.

  4. Add state unemployment insurance taxes and make sure to select the Payroll Liabilities: [State] SUI/ETT Liability account. Then, enter the amount as a credit. Note: You can also combine the following taxes into one debit, or add each tax item as separate debits: State Unemployment Insurance and State Employment Training Tax.

  5. Add the state income taxes by selecting the Payroll Liabilities: [State] PIT/SDI account from the drop-down list. Then, enter the amount as a credit. Note: You can combine the following taxes into one debit, or add each tax item as separate debits: State Personal Income Tax and State Disability Insurance.

  6. Select Payroll Liabilities: Federal Unemployment (940) account to add the federal unemployment taxes (FUTA) and net wages.

  7. Choose the checking account you're paying your employees from and instead of combining them, enter each individual paycheck on separate lines. Then add the amounts on the Credits field.

  8. Hit Save once done.

For reference, you can check out this article: Manually enter payroll paychecks in QuickBooks Online.

 

To learn more about the features in QuickBooks Online Payroll, you can open this link: Get started with QuickBooks Online Payroll.

 

Please feel free to leave a comment letting me know how things go after giving this a try. I'll keep an eye out for your reply. Take care.

T
terryalizeAuthor
December 8, 2021

Thank you so much!

D
DebSheenD
January 23, 2023

Hello there, @LCSSMN.


Let me chime in and share some steps to add the Contractors' payments for 1099 in QuickBooks Online.

 

We can manually add that item in the Chart of Accounts as Payroll Expenses and add them in  Journal Entry (JE) and ensure that you select the correct one. Here's how:

 

  1. Go to Settings ⚙ and click Chart of accounts.
  2. Hit New. 
  3. Choose Expenses.
  4. Look for Expenses.
  5. Tick Payroll Expenses.
  6. Enter the Account name and Description and tap Save.

 

Once done, you can now add the items that you wanted to add to the JE. I'll show you how:
 

  1. Tick + New.
  2. Click Journal Entry.
  3. Under the Journal date, enter the paycheck date.
  4. If you want to track the paycheck number, enter it in the Journal no. field.


Additionally, you can run a payroll summary report to view and see the details of your employees and what you've paid off.

 

I've also added this article that has detailed information about the basic ways of processing payroll: Payroll 101.

 

Leave a comment below if you have other questions about managing payroll. I'm here to lend a hand. Take care.

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