Home » Payroll Module » QuickBooks – How to Pay Your Payroll Liabilities
As you may know as the employer, you are required to track both the payroll expenses and liabilities as per the Employment Standards Act . The following are the amounts and accounts you will look after:
- Company-paid portions of EI and CPP/QPP
- Company-paid benefits for your employees – e.g. company-provided dental plans
- Employees gross pay
QuickBooks sets up a default called Payroll Expenses which will track all these and you can view these through a number of reports (see below). You can find them at the Menu Bar/Reports/Employees & Payroll .
There is also a default account that tracks the payroll liabilities called “Payroll Liabilities “. In that account you will find both the Employee and Employer amounts to be remitted such as EI, CPP/QPP. Federal Income Tax and other company payroll items such as Car Allowance (addition) or Health Plan ( deduction).
When it is time to pay the monthly or bi-monthly payroll remittances, your payment will then reduce that liability account. If that account is current and previously paid, it should zero that account if paid before the next payroll run.
Fr om your Employees section on the Home page you will click on the Pay Liabilites icon which will take you to the Payroll tab, where you will see the Payroll Liabilites section. There you will see five different choices which have to do with specific functions in this area.
The Review Liability Balances icon lets you see the amounts that you have paid during the payroll year, which is a calendar year. These amounts should agree with your remittance slips and if not, then you need to contact your QuickBooks Trainer .
To pay your liabilities select the Pay Liabilities icon and then Set Date Range. If you are paying once per month then the date should be the previous month, since you would be paying this liability prior to the 15th day of the current month you are in. Since I am using a sample company I will be using January 1 to January 31, 2008 .
I have also checked off all the CPP, EI and Federal Income Tax boxes, since there are employees from
a number of provinces including Quebec. The payment date is February 14, 2008 and I will be paying this liability amount at the bank.
Why? Because if I were to mail the remittance, it would not arrive before the February due date and thus would incur a penalty for late payment.
To verify that this amount is correct I would also print out a PD7A report from the tab on that page with the same name. Once I have finished printing the report, it forms a part of my source documents for that remittance or a future audit. I would then close the window to take me back to the Pay Liabilities window where I will choose Create .
You will notice that after choosing Create it directed me out of that screen and back to the previous screen I was working in. QuickBooks also created a bill to pay to the Receiver General and also a cheque to print for that payment.
To verify this, go to your Vendor module and find the vendor named Receiver General. There you will see the amount that is to be paid for the monthly remittance. You will also see a Liability Cheque Type on your transaction page for that amount.
To print this cheque, you go to the Menu Bar/File/Print Forms/Cheques and choose the cheque that says Receiver General in your Payee column, OK/Print .
As mentioned previously I would take the cheque along with the CRA payroll remittance form to the bank for payment and make sure that the teller stamps my copy for proof of payment on that date. After returning to the office I will file the stamped remittance copy along with the PD7A report in a folder called Payroll Remittances. This same folder will be used from year to year until it is entirely full.
Next on the continuing series will be Estimating and Progress Invoicing .
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