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chrisjones-culti
September 23, 2024
Question

Why are Employer / Employee Pension Liability accounts set as Expenditures and not Current Liabilities in a standard chart of accounts?

  • September 23, 2024
  • 1 reply
  • 0 views

I'm just setting up Payroll in QBOnline. 

 

Why are the following top two liability accounts (Employer / Employee Pension Liability) set up as expenditure accounts and not current liabilities in QB Chart of Accounts?

 

1 reply

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ShangY
September 23, 2024

Hello, Chris. I'll answer your question about Liability accounts in QuickBooks Online (QBO) Payroll.


Before anything, could you confirm if you manually created these accounts? If so, we need to make it inactive. Please know that the system will automatically generate accounts needed to run payroll.


Here's how:

 

  1. Select the Transactions menu.
  2. Proceed to the Chart of accounts section.
  3. Look for the accounts (you manually created).
  4. Click the Run report drop-down and select Make inactive.

 

 

Additionally, this article How to create and customise your own Payroll reports will guide you through the process of creating tailored insights for your specific business needs and enhanced visibility into payroll expenses.

Please let us know if you need further assistance with setting up your payroll accounts. We're always here to guide you through the process. Have a good one.

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chrisjones-cultiAuthor
September 25, 2024

No, I didn't create those accounts - That is my point. They were set up by QB. I am asking why they are set up as expenditures, not liabilities.

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payment after leaving
September 25, 2024

HI chrisjones-culti The accounts are set up in this manner to assist with the journal mapping so that the amounts are posted to the profit and loss report (P&L), as liability accounts don't post to the P&L only income and expense accounts. You'll note that they are set up in such a way that they post amounts to these accounts and the P&L as negative amounts. When you pay the pension provider the amounts due you would create an expense and in the category columns enter the employee and employer pension liability accounts, the same as you would if the amounts were posting to liability accounts. You can of course map the journals to your own accounts if you'd prefer not to use the default method used above.

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