Once you set up payroll tax liabilities in QuickBooks, you cannot delete them, but you can still remove any other type of payroll liabilities -such as contributions to health insurance, dental insurance, and 401 (k) – from this accounting software. Payroll taxes are automatically updated when you update QuickBooks desktop payroll, and you also have the option to set up other payroll liabilities as payroll items.
Because payroll taxes are mandatory to pay, you cannot delete them from the QuickBooks desktop. The other contributions, especially the voluntary ones, can be deleted from the software. This can be accomplished by deleting the payroll item itself. You also have the option to edit payroll liability items, but that’s a topic for another time.
In this post, you’ll learn how to delete or remove payroll liabilities from QuickBooks.
Steps to delete or remove payroll liabilities from QuickBooks Desktop
Deleting or removing payroll liabilities should only be done when you have a clear understanding of accounting principles and tax laws. If you delete items that you require for accurately calculating payroll taxes and withholdings, then you’ll ultimately end up filing taxes incorrectly. So proceed with caution, and consult a professional if possible.
Here are the steps to delete or remove a payroll liability from the QuickBooks desktop:
- Go to the Employees menu, then choose Payroll Center.
- In the Pay Liabilities tab, click on the Other Activities dropdown list.
- Choose Change Payment Method.
- Click on Benefits and Other Payments in the QuickBooks Payroll Setup window.
- Choose Schedule Payments.
- Choose the payroll liability item that you want to remove from QuickBooks.
- From the Payment Frequency section, choose “I don’t need a regular payment schedule for this item”.
- Click on Finish, then Finish again.
You’ve successfully deleted the payroll liability from QuickBooks Desktop.
What are payroll liabilities in QuickBooks?
Payroll liabilities are payroll expenses that a business owes but on the basis of the agreement between them and the employer.
While you don’t have to withhold any amount from payments to freelancers and independent contractors, you do need to from payments to your employees on the basis of information in the Form W-4.
1. Payroll taxes
After wages, payroll taxes and contributions to various social programs form the major chunk of payroll liabilities. These taxes include taxes for Social Security, Medicare and Income. While employees pay part of these taxes, employers also contribute for some of these expenses.
Here are the types of insurance and payroll taxes that companies record as payroll liabilities:
- Federal income tax: as per the federal tax rate, employers have to withhold specific amounts from the salaries of their employees.
- FICA taxes: As a US federal payroll tax, FICA (Federal Insurance contributions Act) requires employers to deduct specific amounts from the paychecks of each employee. These deductions go towards funding social programs such as medicare.
- State taxes: of course, state taxes are just as essential as the federal ones. So you must deduct amounts from paychecks to pay those state taxes as well.
- Unemployment tax: both state and federal unemployment taxes have to be paid on a timely basis. Both these programs provide payment to an employee while he or she is unemployed.
- Worker’s compensation insurance: some states require the employer to purchase an insurance that automatically pays workers if they’re injured on the job. The amount for the insurance is paid by the employer while the cost is decided as per the industry standard.
- Wage garnishments: a sum of money that the court requires the employer to withhold from the employee’s salary. This sum is meant to be paid to a third party.
While these items may seem like additional costs on your business, they generally offer an overall benefit. There are various voluntary deductions that you can make as per the request of your employees. These amounts aren’t necessary to withhold, but yohasn’t yet paid. Whenever you run payroll in QuickBooks, the liabilities are automatically recorded so that you can make the final payment at the desired time.
Payroll liabilities include:
- Employee compensation: these are the wages that you pay your employees and contractors.
- Withholdings: these are the amounts that you withhold from your workers to transfer to the IRS and state departments of revenue.
- Other payroll liabilities: these are liabilities generally owned by the employer to the various programs such as Social Security and Medicare. Upon the payment of these payroll liabilities, the payments are transferred to the expense account.
Let’s get into more detail to better understand the types of obligations that employers have so that you can manage payroll more efficiently while complying with the law.
2. Employee compensation
As an employer, you need to pay wages regularly to your employees and contractors. These wages are payroll liabilities as you need to pay them after a specific period.
You can calculate wages on the basis of:
- Salaried workers: the total wages – along with other incentives – that you need to pay your employees.
- Hourly workers: the wages of employees whom who pay on an hourly basis also go into employee compensation.
Independent contractors: freelancers and contractors are to be paidur employee may want you to manage these deductions for additional benefits.
These deductions include:
- Retirement plans: the deducted amount is generally matched by the employer and sent into the retirement plan fund. The employer’s contribution is a payroll liability on the company.
- Health, dental, and life insurance: if you provide these benefits, which most companies do, then you need to pay towards the premium and hold specific amounts from paychecks.
- Union dues: on the request of your worker, you can deduct these dues and forward them to the union.
As mentioned earlier, you cannot delete payroll taxes, but you can definitely remove other payroll liabilities from the QuickBooks desktop. And you can also change the amount of contribution from your end towards a specific program on the basis of rule changes.
How do I turn off payroll liabilities in QuickBooks?
If you’re using payroll in QuickBooks desktop, then there’s no specific requirement to turn off payroll liabilities. You can, instead, turn off the payroll and not use the specific features, but I guess that that isn’t what you desire. Payroll liabilities are essential to record, so don’t disable the feature if you use QuickBooks desktop to manage payroll. Instead, disable a particular payroll item by removing it from QuickBooks Desktop.
How do I delete past-due liabilities in QuickBooks?
You can delete the past due liabilities on the QuickBooks desktop. But first, you have to find out the due liabilities in QuickBooks to take action against them all. You can do so by creating a report that uses various filters to give you access to the required items. You can then delete these liabilities from QuickBooks Desktop.
Is there a way to void payroll liabilities on QuickBooks desktop?
Yes, you can, but only if the payment hasn’t been completed. If you see the status appears as paid, and not as Submitted to Intuit, then you won’t be able to void the payroll liability.
Here are the steps to stop the payment:
1. From the Employees menu, choose Payroll Center.
2. Click on the Pay Liabilities tab, then choose All Payments from the Payment History section.
3. Choose the Payroll item, then double-click on it.
4. Click on Delete, then Void.
5. Click on Save and Close.