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macbeanphotography
March 25, 2021
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How to categorize payroll in checking account transactions

  • March 25, 2021
  • 2 replies
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How to categorize payroll salary and taxes when they pop in on the checking account transaction list.

 

When looking at the profit and loss statement, it looks like quickbooks online automatically puts some transactions in payroll expenses.

 

I have been categorizing the amounts that show up in the checking account transactions into "Salaries 
& Wages" and "Taxes & Licenses". 

 

Now I have all 3 categories on my profit and loss statement. Also, the amounts that show up in my checking account don't match the amounts in the auto generated "Payroll Expenses"

Best answer by Catherine_B

I can help you sort out your recorded payroll transactions, macbeanphotography.

 

Yes, the system automatically creates payroll accounts, and it's mapped by default to your payroll accounting preferences. It can be that when you create regular checks, you selected the payroll accounts you made. Then, when you run payroll the amounts flow to the default accounts the system created. 

 

If you want to use the payroll accounts you created, you can change the accounts in your payroll settings. Here's how: 

 

  1. Click the Gear icon at the upper-right and select Payroll settings.
  2. Under the Accounting menu, click the pencil icon to edit.
  3. You can change the accounts as to where your payroll accounts should reflect in your Chart of Accounts.
  4. If you want to update existing transactions, you can set the date and then Continue.
  5. Click Done to save changes.

I'd highly recommend reaching out to an accountant in case you use the Close the Books feature just not to mess up your account.

 

Feel free to use these articles that will help you manage your payroll information and reports: 

 

I'm here if there's anything else that you need help with. Take care!

2 replies

C
Catherine_BAnswer
March 25, 2021

I can help you sort out your recorded payroll transactions, macbeanphotography.

 

Yes, the system automatically creates payroll accounts, and it's mapped by default to your payroll accounting preferences. It can be that when you create regular checks, you selected the payroll accounts you made. Then, when you run payroll the amounts flow to the default accounts the system created. 

 

If you want to use the payroll accounts you created, you can change the accounts in your payroll settings. Here's how: 

 

  1. Click the Gear icon at the upper-right and select Payroll settings.
  2. Under the Accounting menu, click the pencil icon to edit.
  3. You can change the accounts as to where your payroll accounts should reflect in your Chart of Accounts.
  4. If you want to update existing transactions, you can set the date and then Continue.
  5. Click Done to save changes.

I'd highly recommend reaching out to an accountant in case you use the Close the Books feature just not to mess up your account.

 

Feel free to use these articles that will help you manage your payroll information and reports: 

 

I'm here if there's anything else that you need help with. Take care!

    Z
    Zob-12
    July 1, 2021

    Hi, chiming in here. To continue off of the first question...I have made changes under Accounting in Payroll settings BUT how do I fix the transactions for the previous six months? 

    The gross pay has all come out of a 3rd checking account (inactive) but the net shows in the bank feed. So paychecks have never been matched to the correct bank account 

    S
    SarahannC
    July 1, 2021

    Hello there, @Zob-12. Welcome to QuickBooks Community!

     

    There are several reasons why QuickBooks may not recognize to match the paychecks.

     

    It could be that the transaction is older than 180 days or recorded in a different bank account. Another reason could be that the transaction from the bank is a payment/ deposit of two or more open transactions in QuickBooks. It's also possible that the downloaded paycheck transactions were already added to your bank register. 
     

    When QuickBooks downloads bank data, it tries to find a match with any QuickBooks transactions already entered. If you agree with the match information shown in the row, click the Match button. This will match with the existing QuickBooks transaction. 

     

     

    Afterward, you're good to match the paychecks. Then, categorize them.

     

    You can use these articles as additional reference in fixing bank upload errors, categorizing transactions after imported them, and the reconciliation workflow in QBO:

     

     

    Let me know if you have follow-up questions. I'll be right here to continue to help you. Take care and stay safe always.

    R
    rftltidwell
    October 11, 2021

    Does this option to edit apply to payroll posted manually without the payroll add on through QB?  I need to know if I am posting correctly?  At the end of the year shouldn't the Social Security, Medicare and Withholding accounts equal my 941 reports? Mine doesn't because online payroll tax payments made to the IRS through EFTPS are posted there to.  I'm obviously not manually posting the taxes correctly when posting paychecks.  

    Candice C
    Candice C
    October 11, 2021

    Good afternoon, @rftltidwell.

     

    Thanks for joining in on this thread. Allow me to give you some information on this subject. 

     

    We have a guide that can provide some details on how to manually enter payroll paychecks in QuickBooks Online. Review this article and if you're still not sure, I recommend consulting with your accountant on what would be best. They'll be able to give you the best accounting advice for your business. 

     

    If you have any other questions, don't hesitate to ask. I'm only a post away. Have a great day! 

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