Skip to main content
M
mina4
February 25, 2020
Solved

Which number of 401K should be booked in PL?

  • February 25, 2020
  • 1 reply
  • 0 views
Regarding the payroll booking in quickbooks online plus, if I am not wrong, the number of gross pay, employer taxes and employer 401K contribution should be booked as part of the payroll expenses showing in PL. However, the number as 401K expenses booked in our PL is the total number of employee's contribution and employer's contribution. Since the number of employee's 401K is deducted from the gross pay same as the IRS and State taxes, the only number booked as the expnses in PL should be the portion of employer's contribution. If it is not correct, I appreciate if you can explain me about it showing the details of DrCr accounts. Thank you in advance!
Best answer by john-pero

You are correct that only Gross Wage plus employer taxes and contributions should be in gross payroll but take a closer look and what you might see is that every employee deduction is posted separately as is Net Pay.  I know it seems like a strange way to keep track of something so simple but this may be the case

1 reply

john-pero
john-peroAnswer
February 25, 2020

You are correct that only Gross Wage plus employer taxes and contributions should be in gross payroll but take a closer look and what you might see is that every employee deduction is posted separately as is Net Pay.  I know it seems like a strange way to keep track of something so simple but this may be the case

Ashley H
Ashley H
February 25, 2020

Hello, @mina4. No worries, we'll have everything straightened out in no time!

 

As @john-pero stated, the information is correct. The Gross Wage plus Employer Taxes and Contributions should be in Gross Payroll.  Thanks for the helping hand, John!

 

Let's look further into your Payroll accounts in your QuickBooks Online and how they're mapped:

  1. Go to the Gear icon, then Payroll Settings.
  2. Under Preferences, click on Accounting.
  3. In the Other Liability & Asset Accounts section, look at how the employee's contributions are set up. This should be linked to a Liability account.

Here's a Community Article that provides more information on Payroll Preferences: Payroll accounting preferences.

 

Let me know if you have additional questions or concerns. Have a beautiful day.

M
mina4Author
February 28, 2020

Hi Ashley,

 

Thank you for teaching me such details about payroll settings!

I even didn't know about how the payroll accounts are mapped.

 

I see our employee contribution seems to set up correctly because it ties to "Payroll Liabilities (Payroll Tax Payable)" but the employer contribution (It seems called ADP, right?) also ties to "Payroll Liabilities" which is supposed to go to the payroll expenses. Should I change it?

 

  

 

Terms & ConditionsAccessibility statement