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salary deduction not showing in payroll deductions in balance sheet

ann75
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salary deduction not showing in payroll deductions in balance sheet

Hi,

Appreciate if someone could help with this issue which I think is a glitch in MYOB.

 

Whenever we give an employee a salary advance in any month, we recover that from one of the following months salaries through a payitem ' advance deduction' which is in turn linked to the Balance Sheet account ' Payroll deductions' in Liabilities. So basically , whenever salary is deducted, that amount sits in Payroll Deduction. We then pass a journal entry between 'Advance to employee' (Asset)and 'Payroll deductions'(Liability) to cancel out and close the amounts. This is what we have doing for many years.

 

Howver we found in the months Feb to May of 2023, payroll deductions we had done for 2 employees was not reflecting in the B/S liabilities side in 'Payroll deductions' .It was specifically for 2 employees only. All relevant accounts were correctly reflecting the deduction, eg  cash, wages. Its just that the deduction was not there in Payroll Deductions. After a few days of digging around, we found out that the salary deductions for both these employees strangely were sitting in  PAYG Withholding Payable account. The linked account is payroll deductions and for all others employee salary deductions goes to payroll deductions. So I cannot understand why in just these 2 employees instances , each months deduction went to PAYG withholding acccount.

 

When I look at payroll register report for those months, I can see the amounts correctly in Deductions column and not in PAYG withholding, but  when we look at the Balance Sheet view for that period, you can see it in  PAYG withholding.

 

This clearly seems to be a glitch in the system. Can this be fixed to reflect correctly as we are due to file taxes for 22-23 soon?

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Princess_R
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Re: salary deduction not showing in payroll deductions in balance sheet

Hi @ann75,

 

Thank you for your post, and I regret the delay in responding back to your query.

 

It does seem unusual that the payroll deductions for these two employees are appearing in the PAYG Withholding Payable account instead of the Payroll Deductions account. It's possible that there may have been a change in the linked accounts for these specific employees during the period in question. To resolve this issue, I would recommend checking the linked accounts for these employees to ensure they are set up correctly. Ensure to check the employee payroll details and compare them to the other employee details, specifically the salary advanced pay item. This can be a complex issue, and it requires us to gather information. If possible, please provide a screenshot of the employee's setup for us to investigate further. 

 

Please remove any sensitive information before posting it to the community forum. 

 

Feel free to reach out if you require further assistance.

 

Cheers,

Princess

 

ann75
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Re: salary deduction not showing in payroll deductions in balance sheet

Thank you for your reply. I have attached some screenshots for 1 employee just as a reference, for one month, Feb 2022, though the issue happned over 4 months. . 

1)There is screenshot of the payroll deduction linked account in MYOB 

2) The payroll set up and the deduction set up for the same employee

3) The Break up of Feb 2022 salary for the employee which shows PAYG as $770 and Payroll Deduction as $1000

4) The payroll withholding payable ledger for Feb shows both the above amounts combined as $1770 and sitting in PAYG withholding

 

This has happened for both emploees over 4 months as their advance was recovered over 4 months. In none of the 4 months was either of their deduction  reflected in 'Payroll Deductions'.

Funny thing is when i tried a trial payrun for the same employee this month with the same deduction, it is reflecting correctly in relevant accounts. The issue was for only Feb-May2022. It seems like a glitch in the code happened when the employee deduction was set up then. We did ntot make any changes since initial set up of employees. 

 

Please let me know if you need any more evidence.

 

Thank you

 

payroll set up.PNG
payroll deduction 1.PNG
Break up of employee1.PNG
Payroll withholding payable ledger account for Feb.PNG
Princess_R
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Re: salary deduction not showing in payroll deductions in balance sheet

Hi @ann75,

 

Thank you for providing screenshots, as they greatly aid in understanding the issue at hand. It's possible that a system glitch occurred at the time, or perhaps there were alterations to the account linked to the employee card file. Given that it's quite some time ago, especially if you've already closed the financial year, making changes to this payment, and reallocating it to the correct account could potentially create significant complications. It would be advisable to consult with your accountant before proceeding. Additionally, it's possible that during the pay period, the linked payroll payable account was not correctly linked to what was in the employee's card file.

 

Please let me know if you require further assistance.

 

Cheers,

Princess

ann75
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Re: salary deduction not showing in payroll deductions in balance sheet

HI Princess, thanks for your reply.

I am certain that the settings for linked accounts for employees iin the screenshots I sent were definitely not changed. It was set up this way in Feb 2022 for the first payrun for these employees and payroll deductions made over the next 4 months payroll. Its only now in Feb 2023 when we were preparing the books for tax filing( we havent closed the year yet) that we found the issue. Which is why I think it was a system glitch during set up time for both these employees.

 

I do understand the complexitites around fixing this, at this point, so our accountant will look at working around through journal entries to take the amounts to the correct account. thanks for you responses though. Appreciate it.

Princess_R
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Re: salary deduction not showing in payroll deductions in balance sheet

Hi @ann75,

 

Thank you for your response.

 

Your accountant is currently taking the correct approach by utilizing journal entries to transfer the figures to the appropriate account. It's true that managing these types of concerns, which involve linked accounts for employees and payroll deductions, can be complex and requires the expertise of an accountant to make the necessary adjustments. However, if there's anything else I can assist you with, please don't hesitate to reach out. I'm here to help in any way I can.

 

Cheers,

Princess

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