PAYG, BAS report with QB 2005/2006 Plus

[SimonK]

Hi,

I have recently upgraded to QB 05/06 Plus with the Payroll option from v7.

I'm having trouble setting up the Payroll and PAYG to accurately reflect in the simplified BAS report.

Payroll appears to have created a default PAYG liabilities account which is uses to record both the PAYG amounts I withhold from employees as well as the amounts I pay to the ATO at the end of each quarter. I'd like to be able to use sub-accounts for each of these, as I can see no other way to have the BAS report form accurately reflect the PAYG that has been withheld for each quarter.

While I can create sub-accounts I can't seem to find a way to make the Payroll items split (or create a new Payroll Tax item), so that seems to leave me with the option of either tracking PAYG seperately (either view reports within QBs or using spreadsheets - which I do as a backup) and not getting the BAS report to do what it should be doing , or not using the Payroll feature.

Either that or I fudge the date for the payment made to the ATO to be the last day for each quarter... but then that doesn't reflect with the bank statements.

Is there a way around this other than not using the simplified BAS reporting tool?

Thanks.

[Geoff Young]

If it were me

W1 Should reflect the Account from where the Wages are being paid from. In the sample company Stadium Constructions we have to nominate the sub account "gross wages, and all other accounts that go to making up an employees wages.

A bit confusing as I would have thought we should have just have nominated the Main Account and not a multitude of sub accounts.


W2 You are on the right track with creating sub accounts.

I would personally create a subsidary account called Group Tax under Payroll Liabilities and nominate this account under W2.

To split the payroll accounts you will have to go back into Payroll Items and edit the PAYG tax and nominate the sub account Group Tax

If you have any problems with this please get back to me.

You will be doing me a favour as I have to explain this concept to clients

[SimonK]

Hi,

I tried that, but I must be missing something here as it still doesn't work for me.

I have a Gross Wages account from which... my gross wages are entered. That corresponds to the W1 on the BAS statement in QB, no problem there.

W2 I have selected my Payroll Liabilities : PAYG Witholding sub account - and for this current quarter which has just started it doesn't reflect what I've just withheld, but also includes (as a negative) the PAYG amount I have just paid to the ATO for the last quarter (July).

It's like the difference between doing a Quick report on the PAYG Tax item for this year to date versus this quarter to date.

This year to date gives an accurate figure which I can use for the next (October quarter start) BAS by entering it manually. The "quarter to date" quick report is not usuable for the next BAS because the sub-account used not only has this current quarter's PAYG withheld amounts for October (as a positive) but also the payment of last quarter's PAYG as a negative - as I'm working on a cash basis. Using the "Pay Tax Liabilities now" payroll function has debited the Payroll liabilities : PAYG Witholding account the amount I had to pay the ATO for the July BAS quarter.

Hope I'm being clear - I'm not an accountant and if it wasn't for a basic spreadsheet I run concurrently I'm not sure I'd have understood what QB was doing.

While I can ignore the BAS in QB for PAYG and use "year to date reports" plus calculation sheets, I'd like to try and get it all to work.

Thanks for the help

[Geoff Young]

I now see your problem. on the face of it it appears that the programmers of QuickBooks have got it wrong/

OK That leaves you with three alternatives.

1.As you suggest. Raise a cheque in the payroll system and date it the last day of the quarter that the tax refers to. for example Group Tax that has been collected for the quarter 1/07/05 to 30/09/05 date this cheque 30/09/05. this will be the simplest and easiest option.

or

Outside the Payroll module

2.Enter the Group Tax to be paid into the "Suppliers section" Bills to be paid.
When you enter the Bill use the date of the expense as the last day of the quarter. And then when you pay the cheque from the "Pay Bills" you can then use the correct date as to when the cheque was drawn. This will satisfy the date for your Bank Account.

or

3.Again outside the payroll module when you raise the cheque to pay your Group Tax and debit the Header Account called Payroll Liabilities. This will leave the sub account for Group Tax alone for reporting purposes.

I must admit I use the last method (no3) for my clients that use the Payroll Module.

Hope this helps

Regards

[SimonK]

I like your option 3 - I'll go for that.

And thanks.

Hopefully the QB programmers will get onto this sometime in the near future. :)

[Peace Of Mind]

Hi,

I come across this all the time. unfortunatley PAYG accrues and so a payment in one quarter from the previous quarter tends to reduce the amount owing for that quarter. So....best get around for this that I find is to produce a payroll summary for the quarter and we know that gross wages at W1 is Ok, enter W2 manually directly from the Payroll Summary Report (Last page of the report)

I hope this helps

Cheers

Kaz

[Gillian K]

I would like to suggest that you dont use header accounts as it makes for messy reports and account balances in your chart of accounts.

Your Payroll Liabilities suggested set up with sub accounts is;

PAYGW Liability
PAYGW collected (or Withheld)
PAYGW paid to ATO

By the way I suggest you set up your gst accounts the same!

You can use a chq outside the payroll system or
if in the payroll system after the line entry is in the liabilities tab;
click on the Expenses tab and do a negative amnt to the liability account (PAYGW collected) and the next line entry a positive amnt to PAYGW Paid to ATO acc.
Your PAYG Tax item should be directed to PAYGW collected.

Regards,

Gillian

[percej]

Thanks Gillian.

I can't believe it's over 2 years later and in the latest version I still have to do this "trick". How hard can it be to have a to and from account in the PAYG Tax item setup instead!

I tried various workarounds and like yours best as it keeps it all clean and still allows for proper BAS preperations.

Hopefully they have fixed this in the 08/09 version.

Regards,

John

[Gillian K]

Hi John,

Thankyou for posting nice words.
It has not changed in 0809 QBi series - I have seen, tested and it will be released Apr/May.
The new QBi is very exciting with many changes/new features.
Maybe the next year they will work something better!

All the best,

Gillian
gillian@capturedlivetutorials.com