Why does the paycheck I paid to myself showing as Service Fee/Income in my Profit and Loss Report

Running payroll in QuickBooks impacts several profit and loss accounts, but not income accounts, elle19. I’d like to provide some insights to assist you with this.

In general, paychecks affect expense accounts such as Wages and Salaries, Payroll Taxes, and Employee Benefits. These are recorded on the expense side of your profit and loss statement. Income accounts, which represent revenue from your business activities, are generally not directly affected by payroll processes.

That being said, I'd like to ask if there are payroll items that are mapped in your Service/Fee Income account? Payroll-related additions or deductions can be inadvertently mapped to income accounts, which could explain why the paycheck is showing an income account in the profit and loss report. 

To help you investigate this further, here are the steps to check all accounts affected when you run payroll in QuickBooks:

1. Go to the Gear icon and select Payroll settings.
2. Scroll-down all the way to the Accounting section, then click the Pencil icon in the right-hand side.
3. Review the accounts listed under the To chart of accounts column and look for Service Fee/Income.
4. Once you locate it, take note of the payroll item that's attached to it. Then, click the Pencil icon in the upper-right hand corner to move it to the right account.
5. Select the right expense account and click Save.

You can also read more details about mapping and accounting preferences in this article: Change Your Accounting Preferences In QuickBooks Online Payroll.

Feel free to check out these articles for additional reference materials when running financial reports in QBO: 

• Customize Company And Financial Reports
• Find The Missing Income And Expense Transactions In Your Profit And Loss Report

Remember, proper account mapping is crucial for accurate financial reporting. If you're unsure about any of the mappings or need assistance interpreting the report, don't hesitate to reach out to a QuickBooks ProAdvisor or your accountant for professional guidance.

Feel free to ask more questions in the Community if you need further assistance with payroll or paying yourself in QBO. We're here to help and will respond promptly to offer our support.