Skip to main content
D
dbohls
June 20, 2022
Question

Payroll Accounting mapping Wage Expenses

  • June 20, 2022
  • 1 reply
  • 0 views

So I have my accounting preferences mapped to the desired accounts.  I have run payroll.  The accounts for tax liabilities all have the appropriate values in them.  I do not see anything in the "Payroll Expense:wages" account that I designated.  Payroll shows up the bank account registry, but nothing in my "Payroll Expense: wages".  Is this because the payment hasn't cleared yet?  It makes sense that nothing is in the account for "Payroll Expense:Taxes" as this money has not been sent to the IRS/State (and removed from liabilities) just yet.

 

I am new to payroll accounting. Apologies if this is a basic question I should already know.

1 reply

J
JamaicaA
June 20, 2022

Thank you for choosing QuickBooks as your payroll tool, @dbohls. I've got some insights to share about why your Payroll Expense: wages account is empty.

 

Let’s check what method of accounting you’re using. This way, we’ll learn when our payroll expenses are incurred. With this, I suggest using the accrual method to record both the wages payable obligation (payroll liability) and expenses in the same period.

 

This method records them in the month in which they are done, regardless of when you pay for the expenses. For instance, you owe $3,000 in wages to your employee in March, and your next payroll day is April 5. This means that the $3,000 wage expense as well as a $3,000 wage liability balance are posted on March 31.

 

When you process the payroll on April 5, this reduces cash by $3,000 and wages payable by $3,000. Thus, the revenue for March is more accurately matched and aligned with the company's March expenses, which include the $3,000 in payroll costs.

 

A guide to payroll expenses is an excellent resource for an in-depth overview of payroll expenses. You'll also learn about posting payroll taxes on journal entries from there.

 

QuickBooks Online Payroll automatically creates a default Payroll Expense: wages account for your employees’ paychecks. However, if you want to customize how you track your payroll transactions, visit this article: Change your accounting preferences in QuickBooks Online Payroll.

 

If you need clarification about the payroll expense account or have any additional payroll concerns, please loop me in. I'm always willing to assist you further.

Terms & ConditionsAccessibility statement