User Support Forum

I hope this isn't too basic a question and I will try to explain this as best I can. I don't know why I can't seem to grasp this. I don't even know if our payroll is set up correctly as it was done before I arrived.

We use a payroll service. They call and I tell them how many hours everyone worked, they do all the work including drafting the funds from our bank and paying our taxes. When payroll comes in, I process payroll using the information they provide.

All taxes are processed from each check, so employee and employer taxes are listed on each persons check and processed that way.

For SSI, it looks like employee taxes are processed under Liability account 01-2217 with bank account 01-1110 and employer tax liabilities are processed under liability 01-2217 with expense account 01-5305. The other tax accounts are similar.

I just processed payroll for January and noticed the expense account had a balance of 401.18 before I wrote the manual check for taxes.

The employee tax liability was 1366.08 and the employer portion is 401.18 making a total of 1767.26. Normally I would write a manual check for 1767.26 to show taxes paid but when I do that the 01-5305 account goes up to 2168.44.

Any help is appreciated.

The $401.18 is the employer portion of the tax being expensed out at the time of writing the Payroll check.

When you make the tax deposit payment, you would record that money coming out of the 2217 liability account, rather than expensing it a second time.

Zorak wrote:The $401.18 is the employer portion of the tax being expensed out at the time of writing the Payroll check.

When you make the tax deposit payment, you would record that money coming out of the 2217 liability account, rather than expensing it a second time.

So my check should look like?

01-1110-000 Bank Account, credit 1767.26
01-2215-000 Federal, debit 766.67
01-2217-000 SSI, debit 562.96
01-2219-000 Medicare, debit 131.68
01-2220-000 State Taxes, debit 246.91
01-2230-000 Local Taxes, debit 59.84

If you are paying the whole amount for all the different tax types at once, then yes, that's what it would look like.