Payroll Liabilities

Question

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

melisa_d · Accepted Answer

Hi&nbsp;NicWKDs,&nbsp;
&nbsp;
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.&nbsp;
&nbsp;
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.&nbsp;

melisa_d · Answer

Hi&nbsp;NicWKDs,&nbsp;
&nbsp;
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.
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Our article Deductions has additional information in regards to setting up Deductions.&nbsp;
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Please do let me know if you have any further questions.&nbsp;
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If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

nicwkds · Answer

Hi Melisa&nbsp;The deductions are not linked to payroll liabilities.&nbsp; I set up a liability account for the staff loan and linked that deduction to that liability - so that liability is now zero.&nbsp; The repay overpayment is linked to Salaries and Wages - as it was repaying overpaid wages.&nbsp; 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.&nbsp; Is it going to cause any issues if they are left as not paid?&nbsp;I hope that makes sense!&nbsp;RegardsKaren

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Payroll Liabilities

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