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    judischroeder's Avatar
    judischroeder Posts: 2, Reputation: 1
    New Member
     
    #1

    Mar 29, 2009, 10:27 AM
    Ouickbooks payroll j/e, cash basis using a Payroll Co.
    We use a payroll company to process our payroll. Each payroll they deduct the money for our taxes. If I enter the taxes as a payable, it messes up my books because the money is already deducted with the biweekly payroll. My quarterly reports did not match my QB files and I cannot figure out what I need to do. Please help me.
    MaggieMouse's Avatar
    MaggieMouse Posts: 226, Reputation: 8
    Full Member
     
    #2

    Apr 1, 2009, 03:01 PM

    Your journal entry:

    Dr. payroll expense (include net amount and taxes)
    Cr. Cash

    Cash should be the total of payroll amount and taxes. You don't need the payroll taxes payable amount. You can separate payroll and taxes for easy record in your books.
    Luzmobilebooks's Avatar
    Luzmobilebooks Posts: 2, Reputation: 1
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    #3

    Jun 20, 2012, 01:44 PM
    And what about payroll taxes paid by the employee? It is not an expense for the company.

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    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #4

    Jun 20, 2012, 02:51 PM
    If you have recorded the total of the payroll as suggested the payment of the tax is handled by the contractor.

    So debit payroll expense gross payroll
    Credit payroll taxes deducted
    Credit cash net payroll

    Then pay the tax to the contractor when you settle your account with them

    Alternatively if you settle the gross amount with the contactor each week then you only need record the gross payroll
    Luzmobilebooks's Avatar
    Luzmobilebooks Posts: 2, Reputation: 1
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    #5

    Jun 20, 2012, 03:16 PM
    Thank you very much .
    My situation is with one customer who use Paychex for his payroll.process.

    I use to do accrual basis accounting for Paychex payroll, but my customer wants cash basis accounting. He says I have to record as expenses even the net check received by his employees and the amounts deducted by the bank account by Paychex..

    In this case I guess I can do the same records as you sugest.
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #6

    Jun 20, 2012, 03:27 PM
    Hi I don't want to cover the same ground twice. This is belt and braces thinking. I expect your client wants complete records so the payroll record should reflect what has actually been done but surely the contractor provides a complete record and all you need is the payments journal

    What you could do is set the contractor up as a bank account so your payroll is paid out of that bank account and your cash payment to the contractor is allocated to that account by using the transfer function

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