View your Payroll Liabilities balance
Understand Payroll Liabilities
Understand payroll settlement transactions
View your Payroll Liabilities balance
To view your Payroll Liabilities balance:
- On the left-hand side menu, click Reports.
- In the Detailed reporting section, click Account Transactions (General Ledger).
- For the Account, select Payroll Liabilities.
- Edit the date range as needed.
Review your current Payroll Liabilities to understand the total amount you owe to your employees and the government for your selected time period.
Understand Payroll Liabilities
Payroll Liabilities are the amounts that you owe to employees and tax authorities from your approved payrolls. In Wave, there is a Payroll Liabilities account to help you keep track of these amounts until they are paid.
When you approve a payroll, the total of all the amounts you owe is recorded as a credit in the Payroll Liabilities account. This includes the total net wages and taxes for that pay period. The credit increases the balance of the Payroll Liabilities account.
When you pay your employee wages or the tax amounts owing, the amount paid is categorized as a debit to Payroll Liabilities. This reduces the balance of the Payroll Liabilities account.
If you pay your taxes and wages manually, you must categorize the payments to Payroll Liabilities manually when the payments are made to reduce the Payroll Liabilities balance.
Understand payroll settlement transactions
If you use direct deposit, Wave will automatically create a settlement transaction each time a payroll is run. The settlement transaction is created under your Wave Payroll Clearing account and is categorized as Payroll Liabilities. Learn more about the Wave Payroll clearing account.
This settlement transaction represents the amount that Wave has withdrawn from your bank account for payroll costs. This reduces the Payroll Liabilities account.
Fees for your payroll subscription are not included in payroll liabilities.
If you use automatic bank transaction imports, when the withdrawal transaction from your bank account imports into Wave, it will automatically be categorized as a Transfer to Wave Payroll Clearing. This restores the balance that was withdrawn from this holding account.
If you manually upload or enter your checking account transactions, categorize the related withdrawal transaction as a Transfer to Wave Payroll Clearing.
If you pay your employees outside of Wave, you can manually record the payments as withdrawal transactions or wait for the transactions to import from your bank connection. Categorize the withdrawal transaction to Payroll Liabilities.