Managing payroll is one of the more complicated aspects of running a business, particularly when it comes to liabilities that are payroll-related. This generally refers to wages that are earned and not yet paid, as well as taxes that are owed to the government. If you find yourself looking to zero out payroll liabilities in QuickBooks, you're certainly not alone. Here, we'll guide you through a process that makes sure your payroll liabilities are zeroed out and in the most accurate manner possible.
What is Payroll Liability?
Understanding payroll liabilities is essential before we explain the process on how to zero it out. Payroll liabilities usually include:
- Employee Wages: Payments due to employees for working hours.
- Taxes Withheld: Federal and state income taxes, Social Security and Medicare, as withheld from the employee's wage
- Employer Taxes: Taxes, such as Social Security and Medicare contribution, unemployment insurance, and other.
QuickBooks tracks these liabilities for you, but you may sometimes need to zero them out-for example after applying a payment, correcting an error, or at the end of a payroll period.
Zero Out Payroll Liabilities Step-by-Step in QuickBooks
Step 1: Review Current Payroll Liabilities
Before making any changes, review your current payroll liabilities. You can do this by:
- To navigate to Reports: Under Reports, select it.
- To select the Payroll Report: On this, you have the Payroll Summary or Payroll Liabilities.
- To check accounts: From here, any disparity or amount will be noticed and reviewed.
Step 2: Determine which Liabilities are to be Zeroed Out
Now that you have a clear view of your liabilities, choose the specific ones that need to be zeroed out. Some common reasons to do so are:
- Payments recorded wrong.
- Employee terminations where final wages are adjusted.
- Tax filings adjustments.
