NOTE: This article uses the term "check", please be advised that it is applicable to all locations.
The Payroll Liabilities Balance report includes information about payroll items assigned to a liability account, most deductions, and most company contributions.
What is a payroll liability?
In order to understand how the Payroll Liability Balances report work, we need need to understand first the nature of a payroll liability. Like other liabilities, payroll liabilities are amounts you owe but have not yet paid. In the case of payroll liabilities, These liabilities include payroll tax amounts that you've withheld from employees or that your company owes as a result of your payrolls. Payroll liabilities also include other amounts you track on paychecks using payroll items, for example:
- 401(k) contributions
- Health insurance contributions
- Union dues
- Garnishments for child support
Payroll Liabilities Account
QuickBooks Desktop tracks your outstanding payroll liabilities in the Payroll Liabilities account, based on the payroll items created on each paycheck. When you do your payroll, QuickBooks Desktop calculates how much is owed for each tax, deduction, and company contribution payroll item and records it in the Payroll Liabilities account. QuickBooks Desktop automatically creates the Payroll Liabilities account when you subscribe to QuickBooks Desktop Payroll. With each paycheck you write, the balance of this liability account increases. When you pay your payroll taxes or other payroll liabilities, QuickBooks Desktop decreases the balance of this liability account.
Payroll Liability Checks
Always pay your payroll liabilities using payroll liability checks, which you create in the Pay Payroll Liabilities window. By using payroll liability checks, you can use QuickBooks Desktop to accurately track how much tax and other liabilities you've paid, as well as how much you still owe.
Note: Do not use the Write Checks window; otherwise, QuickBooks Desktop determines that you haven't paid your taxes, and the amounts on your tax forms will be incorrect.
What is in the Payroll Liability Balances report?
- Paychecks dated within the date range of the report. Notice that it is the paycheck date (not the pay period ending date) that determines whether the paycheck is in the date range of the report.
- Payroll liability checks for liabilities owed for any period ending within the date range of the report.For example, if the report covers January 1 through October 31 of a given year, it includes a liability check written for a liability owed for the period ending October 31, even though the check might be dated November 15. However, it does not include a liability check dated January 15 of that year, which was written for a liability owed for the period ending December 31 of the previous year.
- Payroll liability adjustments with an effective date within the date range of the report.
- Employee year-to-date (YTD) summaries dated within the date range of the report.
- Prior payment summaries for liabilities owed for a period ending within the date range of the report. The Payroll Liability Balances report shows the same amounts as the Pay Liabilities window when the To date for the report is the same as the Through date in the Pay Liabilities window.For example, if the Pay Liabilities window shows that you have no liabilities through the end of last month, the report also shows no liabilities for the date range from January 1 of this year through the end of last month.When creating Payroll Liability Balance reports, QuickBooks Desktop can produce incorrect liabilities if the Paid Through date in the liability payments is in a different month than when the liabilities accrued.
For example, liabilities accrued in October, but paid through November, can show as due. This is because when the Payroll Liabilities Balance reportis created from the Report Center, it contains an incorrect date filter.
To run the Payroll Liability Balances report:
- Choose Reports.
- Select Employees & Payroll.
- Choose Payroll Liability Balances.
- Set the date filter.