Payroll question

Fund Accounting, Accounts Payable, Accounts Receivable, Payroll

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EUMC
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Joined: Wed Feb 27, 2008 1:00 am
Location: Exeter, CA

Payroll question

Post by EUMC »

I am trying to set up payroll for our pastor. For Jan/Feb I manually entered each transaction as follows:

CR Checking Account 652.16
DR SP Salary 652.16
CR Retirement withheld 100.00
DR SP Retirement 100.00

Here's the thing- each pay period is actually 752.16 but we have to withhold 100 of it for pension, payable at a later date, which is why I stuck it in a liability account (and why I combined it into one transaction). Then, when we pay it, we will debit the liability and credit the bank account. Should I just be putting the entire amount into SP Salary and then just credit the liability and scrap the SP Retirement? It is part of the salary package but what if we want to break it out? Is the transaction I posted above even possible to do in payroll because I can't make the 100 a deduction unless I use the entire 752.16 as the SP salary.

I hope this makes sense!! Thank you in advance for your assistance!

Zorak
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Post by Zorak »

In payroll, you would simply set up the salary income at 752.16 and have a retirement deduction item processing the 100.00

Pastors Salary Income (credit bank, debit salary expense) 752.16
SP Retirement deduction (debit bank, credit retirement payable liability) 100.00

When this transaction posts from payroll to fund accounting, it will look like this:

CR checking 652.16
CR liability 100.00
DB salary expense 752.16

In your example, it looks like you are claiming the retirement deduction as a church expense, which it isn't. It is the pastor's personal expense, so it isn't debited against an expense account at all, that amount is debited back into the bank, to lower the check amount.

EUMC
Posts: 5
Joined: Wed Feb 27, 2008 1:00 am
Location: Exeter, CA

Post by EUMC »

Thank you! Yes- I am putting it down under retirement expense and your example makes sense. I guess retirement expense would only be used if we were matching, etc....

Anyway, should I reverse the Jan transactions that I manually did the other way? I guess I probably know the answer... :)

Vwisner
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Location: Brookside Congregational Church, UCC
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employee w2's

Post by Vwisner »

Would you do the same thing for an employee contribution to their pension. what do I do to make sure it shows up correctly on their w2 at the end of the year?

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