Create a Direct Deposit Offset item
The steps below detail how to create a Direct Deposit Offset item and how to add the item to an existing paycheck. Performing the offset is necessary for recreated paychecks which have been sent to the employees' accounts but are missing in the register. It is done in order to zero out the Direct Deposit amount of the paycheck and for QuickBooks not to resend the payroll information to the payroll service.
You will recreate a missing Direct Deposit paycheck in your register to properly affect taxes, register, and accounts in QuickBooks.
You need to recreate a Direct Deposit paycheck missing from your register.
Create a Direct Deposit Offset (DD Offset) payroll item.
- In QuickBooks,go to Lists > Payroll Item List.
- Click the Payroll Item button in the lower left corner and select New.
- Select Custom Setup and click Next.
- Choose Deduction and click Next.
- Enter a name to be used for the DD Offset payroll item, e.g., "Direct Deposit Offset" and click Next.
- For Agency for employee-paid liabilities, leave the top two fields blank.
- In the Liability Account field, select Direct Deposit Liabilities. This is to offset the negative amount found in the Direct Deposit Liabilities account.
- Click Next.
- Set the Tax tracking type to None and click Next.
- Make sure there are no taxes selected and click Next.
- Set Calculate based on quantity to Neither and click Next.
- Set Gross vs. Net to net pay and click Next.
- Leave the Default Rate and Limit fields blank and click Finish.
Add the Direct Deposit Offset item to an existing paycheck.
- Go to the Banking menu and select Use Register.
- Select the bank account used for direct deposit payroll.
- Double click the paycheck you want to edit to bring up the picture of the check.
- Click the Paycheck Detail button to view the paycheck details.
- Click to clear the Use Direct Deposit checkbox.
- In the Other Payroll Items section:
- Select the first blank space (next available line) under the Item Name column.
- Click the drop-down arrow and select the Direct Deposit Offset item from the list.
If you get a warning message about Net Pay Locked, follow the prompt and unlock net pay to allow changes.
- In the Rate column, enter the amount equivalent to the Net Pay amount as a negative value.
- Step off the Other Payroll Items field. The amount on the Net Pay field in the Employee Summary section will show amount of 0 (zero).
- Click OK.
- Click Save & Close.
Clear the balance in your Payroll Liability Account for the Direct Deposit offset item.
To do this, follow the steps below:
- From top toolbar of QuickBooks, click Employees > Payroll Taxes and Liabilities > Adjust Payroll Liabilities.
- Date and Effective Date should match the date of the paycheck that you edited.
- In the Adjustment is for, select Company.
Note: Do not select to adjust the Employee, as this will make the Payroll Summary report incorrect.
- In the Item Name Column, select the DD Offset item you used on the paycheck.
- In the amount column enter the total amount of DD Offset as a negative value.
- Click Accounts Affected and select Do Not Affect Accounts.
- Click OK on Affect Accounts window.
- Click OK on Liability Adjustment window to save your entries.