Getting your QBO chart of accounts right for payroll is the foundation of clean books. Here's the recommended setup with account types and detail types for each account.
Payroll expense accounts
| Account Name | Account Type | Detail Type |
|---|---|---|
| Wages & Salaries | Expenses | Payroll Expenses |
| Payroll Tax Expense | Expenses | Payroll Expenses |
| Employee Benefits Expense | Expenses | Employee Benefits |
| Contract Labor | Expenses | Contractors |
Payroll liability accounts
| Account Name | Account Type | Detail Type |
|---|---|---|
| Federal Income Tax Payable | Other Current Liabilities | Payroll Tax Payable |
| Social Security & Medicare Payable | Other Current Liabilities | Payroll Tax Payable |
| State Income Tax Payable | Other Current Liabilities | Payroll Tax Payable |
| FUTA Payable | Other Current Liabilities | Payroll Tax Payable |
| SUTA Payable | Other Current Liabilities | Payroll Tax Payable |
| Health Insurance Payable | Other Current Liabilities | Other Current Liabilities |
| 401(k) Payable | Other Current Liabilities | Other Current Liabilities |
| Net Payroll Payable | Other Current Liabilities | Other Current Liabilities |
How to create accounts in QBO
- Go to Settings > Chart of Accounts > New
- Select the Account Type and Detail Type from the dropdowns
- Enter the account name
- Click Save and Close
Sub-accounts for multi-department payroll
If you track payroll by department (Sales, Operations, Admin), create sub-accounts under Wages & Salaries for each. QBO allows sub-account hierarchy two levels deep.
Once your accounts are set up, PostBooks maps your payroll provider's line items to these accounts automatically. Start your free trial.