Employee loan repayments from payroll showing as a payroll liability
In this case, the employee has deductions from his pay, directed to go to a loan account in the balance sheet. Ever since they started, Dec 2023,the repayments have accumulated in the Payroll liabilities where you go to pay PAYG & Super. The loan a/c is in Long Term Liabilities. The payroll item "repay loan" is a deduction and on the second screen of setup, it is called "Agency for employee-paid liability". where only the gen.ledg. loan a/c being entered. Also no to tax tracking. So how do I stop the accumulation in the payroll liabilities?
Best Answer
-
Glad you worked it out 👍🏻
By (correctly) selecting not to affect accounts, all it’s doing is clearing the Payroll Item ITSELF (eg removing this “liability” from displaying on your Payroll Liability reports, as these are driven purely by the Payroll Items themselves, not any accounts they’re linked to. It has no impact other than that ☺️)
Shaz Hughes Dip(Fin) ACQ NSW, MICB
*** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! *** Bookkeeping & 1-on-1 customised software Training/Troubleshooting ***
* Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *
Accounted 4 Bookkeeping Services
Ballajura, WA
(NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
2
Answers
-
Any payroll deduction that’s configured, will accumulate there.
I just use the Adjust Payroll Liabilities option - with Do not affect accounts selected - to clear it (each month or qtr) ☺️
Shaz Hughes Dip(Fin) ACQ NSW, MICB
*** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! *** Bookkeeping & 1-on-1 customised software Training/Troubleshooting ***
* Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *
Accounted 4 Bookkeeping Services
Ballajura, WA
(NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
2 -
I started to do this, changed the button to "employee", but as soon as I select the Repay Loan payroll item, up comes "You have chosen a payroll item that cannot be adjusted. You can only adjust tax payroll items.
So next time, stayed with the Company button, was able to enter an adjustment, and OK, and then up comes a window "Account for E;ee Adj." with the default being Wages & Payroll Exp in the P&L.
Cancelled out of this, worried it is going to put a transaction through that will effect P&L. These deductions have correctly gone to the loan a/c in long term liabilities.
OK, finally worked it out. Before clicking OK, there is a button on the right "Accounts Affected", here you can select "do not affect accounts" then ok, and it has worked.
But I haven't come deductions all going into payroll liabilities before. Puzzled as to why this has only happened since I started this new deduction Dec.23.
1 -
I still have this issue with a deduction which is not a payroll liability, it is a loan repayment. Surely there is a better way to fix this than doing a liability adjustment every month?
0 -
Have you tried linking the deduction to the loan liability account where the original loan was entered
0 -
Another workaround is to use a negative Addition. This avoids it going to “Pay Liabilities” (but you need to ensure you enter the amount on the Paycheque with the minus (“-“) sign each time 😬)
Shaz Hughes Dip(Fin) ACQ NSW, MICB
*** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! *** Bookkeeping & 1-on-1 customised software Training/Troubleshooting ***
* Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *
Accounted 4 Bookkeeping Services
Ballajura, WA
(NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
0 -
Re Kris Williams reply - when the deduction was set up, it was created as a payroll deduction. Where it asks for agency and number, this was left blank. Then is asks for Liability A/c - there I selected the Long Term Liability Loan A/c XYZ. I tried leaving it blank, but it won't let you. Tax tracking is none.
I've just tried Shaz's method and that worked. Entered it as negative. Even the deduction had to be entered as a deduction also, otherwise it added it on too.
Many thanks,
2
