What is 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 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 calculates how much is owed for each tax, deduction, and company contribution payroll item and records it in the Payroll Liabilities account. QuickBooks automatically creates the Payroll Liabilities account when you subscribe to QuickBooks Payroll. With each paycheck you write, the balance of this liability account increases. When you pay your payroll taxes or other payroll liabilities, QuickBooks decreases the balance of this liability account.
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 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 determines that you haven't paid your taxes, and the amounts on your tax forms will be incorrect.
Payroll Liability Balances Report
Use the Payroll Liability Balances report to see the outstanding payroll liabilities your company owes. You can change the time period covered by changing the dates in the From and To fields. If your company paid a liability incurred within the date range of the report, the report omits that liability, even if the payment occurred after the ending date of the report. This report creates totals by payroll item, not by agency. You can also modify this report to show the liabilities you've paid instead of what you owe:
- Click Modify Report. Click the Filters tab.
- From the Filter scroll box, select TransactionType.
- Choose TransactionType > Payroll Liability Check.
To see a list of the transactions that make up an amount, double-click the amount.
To access this report: Choose Reports > Employees & Payroll > Payroll Liability Balances.
See also articles about payroll liabilities on the payroll.com web site.