Payroll entry?

[Heidilr1]

For 1 of our employees, we have a med125 deduction (pre-tax medical insurance). I am trying to determine the payroll entry each pay period. This is not an expense to the church, so I am not debiting an expense account. Currently, this is what I do:

Debit 8040 (Salary expense) ***
Credit 1110 (Ckg. Act) ***

Debit 8040-101 (EE Taxes) ***
Credit 2205-101 (EE Taxes Pble) ***

Debit 8070 (ER Taxes) ***
Credit 2201 (ER Taxes Pble) ***

Debit 8040-005 (Spouse Insurance Expense) ***
Credit 2270 (Health Ins. Pble) ***

It is this last entry that I don't think is right, but I'm not sure how to reflect the liability (til we pay the insurance bill); the deduction from her pay; and yet not an expense to the church.

Thanks for your help!!!

[Heidilr1]

I may have figured it out. Does this sound right - almost too good to be true:

Simply credit the pble when I make the payroll entry, and when I pay the insurance, debit the pble.

Payroll Entry;
Debit each person's payroll expense
Credit the tax liability accounts (employee only)
Credit the health ins. pble.
Credit the ckg account

When I pay the taxes:
Debit the tax liability accounts
Debit the ER tax expense accounts
Credit the ckg. account

When I pay the insurance:
Debit the payble
Credit the ckg. account

[JohnDMeyers]

If it does what you want it to do, then I guess you are set.

From what I can tell, money is still leaving the church checking account to pay the Health Ins. Payable.

When you credit the Health Ins. Payable in the Payroll Entry, you are creating a "negative expense". If you looked immediately after you did this, and there was only one entry in that account, it would have a negative balance on your income/expense sheet.

When you "pay the insurance" you zero-out the negative with a positive amount of the same value.

It's actually doing the same thing that would be done if you used a liability account instead of an expense account.

So it comes down to which way is your preference.

[NeilZ]

What version of Powerchurch are you using ?? If I remember right, v11, when you setup a pre-tax deduction payroll item such as this, will ask for the liability account to be used.