Enter payroll history
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Enter payroll history
If you're switching to Wave mid-year, you need to enter your historical payroll data. This helps ensure that employee tax forms and pay stubs are accurate, and allows Wave to calculate the appropri...
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I have been using Wave Payroll for a few years but I am new to Wave Accounting. Will the steps in this post work for me?
If so, do I need to make sure the transactions related to payroll (imported from my bank) are uncategorized before I work through the steps? Also, where is the gear icon exactly?
If not, what do I do? I intend to start Accounting from January 1, 2019 and have imported my bank transactions from that point.
I see the journal entries in Accounting > Transactions > "Payroll period ending...", but I do not understand how to categorize my imported bank transactions to match and so my reports are accurate.
Specifically, these are the imported bank transactions I don't know what to do with:
-- Monthly payroll tax payments to the IRS
-- Payroll
-- Estimated income tax payments for 2019 in April & June via EFTPS
-- Estimated income tax payment for 2018 in January via EFTPS
-- Q1 payment to IRS (not sure what this even is)
-- Q1 payment to TX (not sure what this even is)
Hey @amya, thanks for reaching out! It is not possible to enter Payroll history after a payroll has been ran & approved, this step is an onboarding step that is available during your set up.
In regards to bookkeeping for your Payroll, those journal transactions will be bookkept in two steps: 1. The creation of a journal transaction, and
2. an expense transaction in the Transactions page
You’ll notice here that, instead of being recorded to a bank account, Total net pay owing to employees is recorded to Payroll Liabilities. So, when a payroll is approved, the liability account is credited (increased) by, the amount that they owe the employees. This is the accounting equivalent of saying “I approved payroll, so now I owe my employees the wages from that payroll.” Wave will also create a withdrawal transaction in the Transactions page whose account is set to the funding account from Account Mapping, and whose category is set to Payroll Liabilities. The date of this transaction will match the withdrawal date for the employer's Direct Deposit. Where the journal transaction credited Payroll Liabilities, this transaction debits it by the amount of the withdrawal. This is the accounting equivalent of saying “Ok, now I’ve actually paid my employees.” If you have a bank account connected, it will pull in the same withdrawal transaction (which is, I believe, what you were referring to above), so you will have to either merge the two transactions, or delete the bank-imported transaction, as Wave will have already accounted for it. I hope this helps, please let me know if you need anything else.
How do you do this for contractors (vendors)? I'm looking to do this so my T4As are accurate.
Hey @DarwinL , payroll history is only for employees, not for contractors. The T4a slip is based off the Bills (payments) that you create for your contractor. If you want to represent old amounts, you can create these through Bills like you would a new payment.