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Payroll Liabilities

NicWKDs

I have made some deductions in our payroll - repaying an overpayment of wages and a staff loan. These amounts have both been paid in full via weekly payroll deductions, but the amounts are still sitting in the payroll liabilities as not paid. How should I handle these as I don't want to affect the bank account? Thank you.

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Melisa_D

Hi @NicWKDs,

Thanks for your response. Generally speaking an over payment and repayment would be processed as per this help article Fixing a payroll overpayment or underpayment. In regards to the employee loan, generally this would be set up as an asset not a liability as per the help article Wage advances and employee loans.

If you're unable to delete/reverse the pays and reprocesses as per the help article, I would recommend speaking to your accountant or financial advisor about the relevant journals to clear the liability.

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NicWKDs

Hi Melisa

The deductions are not linked to payroll liabilities. I set up a liability account for the staff loan and linked that deduction to that liability - so that liability is now zero. The repay overpayment is linked to Salaries and Wages - as it was repaying overpaid wages. Because the deductions are not technically being paid onto a third party such as a child support payment, I don't know how to get them marked as paid. Is it going to cause any issues if they are left as not paid?

I hope that makes sense!

Regards

Karen

Melisa_D

Hi @NicWKDs,

Thank you for your post. Can I please clarify if you've set the linked Payable account for these deductions to the Payroll liabilities account ? If so, when you process your pay run you can record the transactions using Pay Liabilities, this is explained on our help article Paying Payroll liabilities.

Our article Deductions has additional information in regards to setting up Deductions.

Please do let me know if you have any further questions.

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.