How to Enter Paychex or ADP Payroll in QuickBooks
Should our gross payroll expense include our employee’s deductions? Or should we consider the net pay to employee as our payroll expense? The employee’s withholding was paid directly by paychex. Is that part of our payroll expense too? What would be the journal entry in QuickBooks?
You really should enter each payroll individually, otherwise reconciling your bank account is going to be a nightmare. In this case, I recommend entering a check for each debit from your bank account. You’d enter the gross payroll as a positive number and employee withholding as a negative number. The net check would be what was actually debited from your account.
When you pay your payroll taxes ($59903.30) you’d enter two accounts – $50558.74 for payroll tax liabilities and $9344.60 for payroll tax expense.
But if you want to enter a journal entry for the entire year, it should look like this:
Debit – payroll expense ($168000)
Debit – payroll taxes ($9344.60)
Credit – bank account ($177344.60) – $117441.26 net pay + $59903.34 payroll taxes
I recommend switching to QuickBooks Assisted Payroll. It’s integrated with QuickBooks so you don’t need to enter journal entries. It’s also less expensive than Paychex.
Here are the standard fees. We can get you 20% off your monthly service fees for the first year:
This article is provided for informational purposes and is not intended to be construed as legal, accounting, or other professional advice. For further information, please consult appropriate professional advice from your attorney and certified public accountant.