How to Delete Payroll Liability Adjustment in QuickBooks (2023)
Most users are not aware that they can delete the payroll liability adjustment in QBs. Or may they not know the right way to adjust or delete the adjustment liability?
You don’t have to worry in any case.
This article will get you through how to delete payroll liability adjustments in QuickBooks.
Let’s get into basics first…
What is payroll liability adjustment?
The payroll liability adjustment in QuickBooks refers to any payment related to the payroll that your business borrows but has not paid yet. It includes withholdings of taxes from employees, wages that employees owe, and other costs.
Payroll liability adjustment, in short, covers these incorrect taxes or overpaid liabilities. In layman’s terms, it fixes the incorrect payroll liabilities.
Common reasons for payroll liability adjustments in QuickBooks:
- Fixing payroll items entered with the wrong tax tracking type.
- Changes related to the YTD wages, taxes, addition, and deduction items.
- Changes to 401(k) Health Savings Account (HSA) under company contribution items.
How does the payroll liability adjustment work?
When you enter payroll in QuickBooks, it calculates the deductions, company payroll contribution items, and taxes. It is recorded in the payroll liabilities account.
It happens automatically if you subscribe to QuickBooks Desktop payroll.
When you issue paychecks, the liabilities account increases and decreases on payment of payroll taxes or liabilities. Paying payroll on time is part of statutory compliance.
How can you find payroll discrepancies?
You can run a payroll check-up (applicable to QuickBooks Desktop Basic, Standard, and Enhanced Payroll).
You can even run a payroll summary report for any month or quarter that requires adjustment. Do take note of the payroll items that need adjustment.
Note: For payroll checkups for the previous year, you need to change the computer system’s date to the last date of the year.
How can I delete a payroll liability adjustment in QuickBooks?
Following are the steps to delete the payroll liability adjustments in QBDT:
- Go to the Employee menu.
- Click on the “Payroll Centre”.
- Find the “Adjust Payroll Liabilities” link under the “Pay Liabilities” tab.
- Click on the link and hit the “Previous” button until you find the liability adjustment you want to delete.
- Once you find the transaction you want to delete, click on the “Edit” button in the menu bar.
- Click on the “Delete Payroll Liability” option.
Note: Make sure you use the previous button to view liability adjustments before removing it from the account.
To audit payroll liabilities, we review payroll reports, verify tax rates and amounts, reconcile payroll accounts, confirm timely payments to tax authorities, and ensure compliance with labor laws and regulations.
To account for payroll liabilities, we record gross wages, withholdings, and employer payroll expenses in the general ledger. We also ensure accurate and timely payment of these liabilities to the respective authorities.
To clean up payroll liabilities in QuickBooks, we review the Payroll Summary Report, ensure accuracy in transactions, adjust incorrect entries, clear outstanding liabilities, and reconcile payroll accounts to match bank statements.
In QuickBooks, we can adjust payroll liabilities by going to the Payroll Center > Selecting the Liability Balances tab > Find the liability to adjust > Select Adjust Payroll Liabilities feature to correct amounts > Save changes.
