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How to Reconcile Payroll Liabilities in QuickBooks Payroll in 6 Easy Steps

When managing payroll in QuickBooks Online, it is important to ensure that payroll liabilities are accurately recorded. However, there may be instances where adjustments need to be made due to various reasons, such as correcting an error or reflecting changes in employee benefits. We understand how important it is for our customers to have accurate financial records.

  • Thus, if you change the employee status instead of deleting it on QuickBooks, the profile and pay records remain in your accounting database without any data loss in your tax payments.
  • Make sure that the adjustments are correct by selecting the appropriate reports when finished.
  • If you’re not yet using QuickBooks Online to manage your small business accounting, check out our 2021 guide to the best small business accounting software, where QBO ranks #1.
  • Create a payroll liability schedule if you have regular payroll liabilities that must be paid so that you can do so on time.
  • Dancing Numbers template file does this automatically; you just need to download the Dancing Number Template file.
  • A payroll liabilities adjustment will result in a permanent change to your company file, so it is crucial to make a backup so that you have a copy of your current file in case you need it later.

This feature allows you to share bills, payments, information, and much more. In the Delete process, select the file, lists, or transactions you want to delete, then apply the filters on the file and then click on the Delete option. Still, if you are confused about payroll adjustment and how to edit them in QuickBooks Online, then you can connect with industry experts like us.

Step Two: The next step is to adjust the Payroll liabilities with the following steps:

You need to click “Start” to Export data From QuickBooks Desktop using Dancing Numbers, and In the export process, you need to select the type you want to export, like lists, transactions, etc. After that, apply the filters, select the fields, and then do the export. You have to verify the next liability amount by confirming your adjustment was added to the payroll. One of the clients was issued a credit for State withholding. Below are the steps that are used to enter the credit in QuickBooks Online Payroll Essentials. Let’s learn more about the importance of adjusting payroll in QuickBooks Online.

  • No taxes are withheld on compensation paid to independent contractors.
  • This will enable you to maintain accurate financial records, comply with tax regulations, and make informed decisions based on reliable payroll data.
  • We provide you support through different channels (Email/Chat/Phone) for your issues, doubts, and queries.
  • Now, let’s dive into the step-by-step process of adjusting payroll liabilities in QuickBooks Online to ensure your financial records are accurate and up to date.

Click “Add,” and repeat to add any additional tags you need (like ER for employer transactions). Then they expect you to pay more for the monthly employee fee and $500.00 for new 2023? Additionally, please note the business hours to make sure they’re available for assistance. I have just spent 1 1/2 hours on the phone with a QBO Payroll “Specialist” who had no idea how to fix this issue. Since QBO has many many non profits one would think that they would make this an easy fix.

Pay or adjust payroll liabilities

I now have a case number and am waiting for someone to call me back. If you have further questions or concerns, feel free to reach back out anytime. You have clicked a link to a site outside of the QuickBooks or ProFile Communities. By clicking “Continue”, you will leave the community and be taken to that site instead. I have followed these instructions and these are still showing up in liabilities to be paid.

Banking Transactions

The matching concept presents a more accurate picture of company profit. Create Prior Tax Payment choose your tax type and your period dates. I didn’t put in a check number, but I did notes and payment date. I have checked this and it does not show up under the bank register or under the vendor. Liability adjustments for payroll in QuickBooks Online are required for multiple reasons. Prior to going for payroll liability adjustment in QuickBooks Online, one must know why you need to adjust the liabilities.


If adjusting is going to somehow alter the data that you receive on your 3-monthly return, you should consider making a QTD adjustment instead of a YTD adjustment. They’ll be able to pull up your account in a secure environment, conduct further research with you, and create an investigation ticket if necessary. After printing your reports, it’s a good idea to download the transactions from QuickBooks into an Excel spreadsheet. It makes it easier to organize the transactions so it’s clear which amounts cleared and which did not.

You have to run the “Payroll Checkup” this will help you to detect the problem that may affect your liabilities. The following steps are only applicable to users of the Enhanced, Basic, and Standard payroll services. We’ll send an email notification to the Primary Admin listed in QuickBooks Online that shows the status of your tax payments. Throughout her career, Heather has worked to help hundreds of small business owners in managing many aspects of their business, from bookkeeping to accounting to HR. Before joining Fit Small Business, Heather was the Payroll/HRS Manager for a top cloud accounting firm in the industry. Her experience has allowed her to learn first hand what the payroll needs are for small business owners.

How might I reduce my payroll liabilities?

It’s particularly important to track your payroll liabilities and to submit payments on time. When you have unpaid wages or withhold amounts from payroll, you’re creating payroll liabilities. QBO payroll tax support is useless and the software has too many glitches. I have called numerous times to tech support and they still current portion of long term debt definition have not fixed issue with FUTA taxation. They so incompetent asking for Publication 15 that should be a core of PR taxation and even ask to provide tax document from Federal tax authority. When companies wish to make changes in year-to-date or quarter-to-date of the employee, then the right payroll adjustment is important.