Background

Once you have written paychecks for your employees AccountEdge has the ability for you to pay the liabilities owed to the government, insurance companies, or anyone else for whom you had set aside Deductions, Expenses or Taxes. In addition, reporting is available to check how much money is owed and that correct amounts were set aside.

Payroll Categories

There are 5 types of Payroll Categories (Wages, Deductions, Expenses, Accruals, and Taxes). In the Canadian product, there are only 4 types of payroll categories as there isn't a separate category for Accruals. In the Canadian software Accruals are instead part of the Expense category.

Payroll Liabilities can be associated with deductions, expenses, or taxes.

Taxes: Taxes are unique in that you cannot modify Payroll Tax rates or add new Payroll Taxes. These are built directly into the software and updated via Payroll Tax Updates for those on eligible support plans.

Deductions: Deductions are amounts withheld from employee paychecks. They can either be tax-exempt (reduce the wages before taxes are applied) or taxable (the deduction amount is withheld after having taxes applied). Examples of deductions include wage garnishments such as child support, benefit plans such as 401ks, and employee-paid health insurance.

We have several support articles that explain how to create specific deductions (some of which also require expenses to be set up):

• 401K or IRA Plans
• Washington L & I
• Health Savings Account

Expenses: Expenses are amounts that are set aside when running payroll checks. These amounts aren't deducted from employee paychecks as they are paid entirely by the employer.

We have several support articles that explain how to create specific expenses (some of which also require deductions to be set up):

• California ETT
• Washington L & I
• Ontario WSIB

The Pay Liabilities Window

You can make liability payments by following this process:

1. Go to Payroll > Pay Liabilities
2. Select the dates to include transactions from and check the payroll categories that you want to include in this payment. Note: When choosing dates to include, you are choosing the date of the paycheck. For instance, if you recorded a paycheck with a date of April 1st that was paying the employee for the Pay Period of March 1st through March 31st, you would need to include April 1st in the Pay Liabilities date range. Additionally, when selecting the date, you need to put the date in and then hit the "tab" key on your keyboard - otherwise, the date will not be selected.
3. Check the categories for which you are making liability payments
   
   
    

Liability Reporting

There are several reports that are helpful for Payroll Liability Reporting. You can find these reports by going to Reports > Index to Reports > Payroll from the top of the screen. In the section labeled "Payroll Liabilities," there are two reports.

• Payroll Liabilities by Category: lists payroll liability amounts that have been withheld
• Liabilities Payment Register: lists payroll liability amounts that have been paid

Additionally, under Reports > Index to Reports > Accounts you will find a section labeled "Exceptions." Within this section, you will find the Payroll Liabilities Reconciliation report. This report compares the total value of unpaid payroll accrual transactions to the balance of the linked accrual accounts.

If there is an out-of-balance amount, any entries to the linked accrual account that were generated by a General Journal entry or a Sales, Purchases, Spend Money or Receive Money transaction are displayed. If you want, you can view the original transaction window and make changes.

Pay Liabilities Amount Doesn't Match Amount Owed

The Pay Liabilities window is only affected by two types of transactions. Paychecks and Pay Liability payments are the only transactions that will affect this window. That means that if due to rounding or credits from previous payments the amount you actually owe is slightly different from the amount showing in the Pay Liabilities window you cannot make this payment.

You can instead make this payment from the Spend Money window for the amount desired. This means that this amount will continue to show as being owed when entering the date that would include these accrued amounts in the Pay Liabilities window. This also means that the Payroll Liabilities Reconciliation report will show an out-of-balance amount.

Adjusting Employer Expense Amounts

If you have incorrect amounts for any of your "Employer Expenses" due to a mistake and need to update this amount to reflect properly in the "Pay Liabilities" window, you can create a $0 paycheck for the adjustment:

1. Go to "Payroll" and "Process Payroll".
2. Select the appropriate date range and payment date for the period you're looking to adjust, then click "Next".
3. Choose one employee to process, and leave all others unchecked.
4. Click on the arrow next to the Employee you want to process, this will pull the paycheck up.
5. From here change the check number to "ADJUST"
6. Now zero out all Wages and Deductions so the entire check has no amounts.
7. Then scroll towards the bottom of the check where you have Employer Expenses.
8. You will want to enter your adjustment amount into the 'expense' side. (The liability side will auto-populate based off what is entered in the expense.)
9. If you need to lower the amount due in Pay Liabilities you would enter as a negative amount.
10. If you need to raise the amount, you would enter a positive amount
11. Once the amounts are entered you can click "OK". You will get a message "Paycheck has a $0.00 Net Pay. Click OK if you wish to void this paycheck". Click OK.
12. After this you can go ahead and record the paycheck. Once recorded, the amounts in Pay Liabilities should now be updated

If you have Hourly Employees and use Timesheets, you will have to create a Timesheet including at least one hour. This way you can generate the Paycheck screen for the adjustment**

If the employer expense that is being adjusted has a limit make sure to edit the Pay History of the employee's card file so that this adjustment does not affect the limit.

Troubleshooting Payroll Reporting

For further trouble shooting help please see Quarterly Tax Report Doesn't Match Tax Detail.