Recording a Missed Payroll and Manual Tax Payments

Overview

This article explains how to enter a payroll that was processed manually but not recorded in the system, and how to record any related tax payments that were made outside the program. Use this guidance when a prior-quarter or current-quarter payroll needs to be added before the applicable quarterly tax return (for example, Form 941) is filed.

When to Use This Process

  • A payroll was processed manually (outside the system) and was never entered into the program.

  • Tax liabilities from that payroll have not been captured in the system.

  • Related tax payments may have already been made outside the system and need to be recorded.

  • The correction must be completed before the applicable quarterly tax return is filed.

Step 1 — Enter the Missed Payroll as an Additional Payroll

A missed payroll can be entered by using the Additional Payroll option, which allows the payroll to be back-dated to the actual pay date so it is captured in the correct pay period.

  1. Navigate to Payroll Processing.

  2. Select Payroll Entry.

  3. Choose Additional Payroll as the payroll type for the client.

  4. Enter the Pay Period and Pay Date for the missed payroll so it is back-dated to the correct period.

  5. Confirm the payroll is processed in accordance with the client's Form 941 tax deposit frequency (monthly or semi-weekly).

  6. Enter the hours and wage information for each affected employee.

  7. Select Review to verify the payroll details.

  8. Approve the payroll to finalize the entry.

Step 2 — Review Outstanding Tax Liabilities

After the missed payroll has been approved, the system will generate the associated tax liabilities. Review these to determine which liabilities are outstanding and which may have already been paid outside the system.

  1. Navigate to Tax Payments.

  2. Select Pending Payments.

  3. Review the outstanding tax liabilities generated by the missed payroll.

Step 3 — Record Tax Payments Made Outside the System

If a tax liability has already been paid outside the system, it must be recorded so the payment history is accurate and duplicate payments are avoided.

  1. Navigate to Tax Payments.

  2. Select External Payments.

  3. Record each payment that was made outside the system using the correct Tax Type, Period End Date, Date Paid, and Amount.

  4. Save the entry so the payment is reflected in the system.

If the liability has not yet been paid, decide whether it will be paid through the system's EFT process or manually outside the system, and take the appropriate action before the applicable quarterly return is filed.

Why This Matters

Entering the missed payroll and recording any external payments before the quarterly return is filed helps ensure that:

  • Payroll tax liabilities are accurately tracked in the system.

  • The quarterly tax return reflects the correct wages and taxes.

  • Duplicate payments are avoided.

  • Penalties and interest are minimized by resolving discrepancies before the filing deadline.

Tips for a Smooth Correction

  • Verify the correct Pay Period and Pay Date before entering the Additional Payroll to make sure it is captured in the intended quarter.

  • Confirm the client's Form 941 deposit frequency (monthly or semi-weekly) before processing so tax deposit timing is handled correctly.

  • Review Pending Payments and External Payments after the correction to confirm all liabilities and payments are accounted for.

  • Complete the correction before the applicable quarterly tax return is filed to avoid amending the return later.

Key Takeaways

  • Enter a missed payroll through Payroll Processing > Payroll Entry using the Additional Payroll option, back-dated to the correct Pay Period and Pay Date.

  • Review outstanding liabilities under Tax Payments > Pending Payments after approving the payroll.

  • Record payments already made outside the system under Tax Payments > External Payments using the correct Tax Type, Period End Date, Date Paid, and Amount.

  • Complete these steps before the applicable quarterly tax return (for example, Form 941) is filed to keep records accurate and avoid duplicate payments.