Setting up a Retirement Liability/Expense
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Setting up a Retirement Liability/Expense
When I set up my retirement that will be deducted out of my check, should I setup a liability account or an expense account?
Re: Setting up a Retirement Liability/Expense
Its something that the congregation is obligated to pay out, its a liability.northside wrote:When I set up my retirement that will be deducted out of my check, should I setup a liability account or an expense account?
Based on what you're saying, I'm assuming this is a voluntary retirement deduction, therefore it comes out of your salary, which is an expense to YOU, but not to the congregation. So when you setup the Payroll Item Description, you will be using the Other Deduction type of item. You can also decide whether this is a pre-tax deduction, or an after-tax deduction depending on the type of retirement account it is.
You'll see that when you select this type of Payroll Item, it only gives you the choice of a Liability account to use, since the funds are deducted from your base pay.
Neil Zampella
Using PC+ since 1999.
Using PC+ since 1999.