Re: payroll tax payments

GWatkins · Post by **GWatkins** » Tue Feb 24, 2009 11:10 am

i might not have ask my previous question correctly. so i will re-ask in a different way. Since our payroll is outsourced to ADP they pay employee taxes (payments to the IRS) by debiting the church's checking account weekly. I know that it shows on our bank statement so i know i need to credit the bank account but i'm not sure what account (liability?) to debit?

JohnDMeyers · Post by **JohnDMeyers** » Sat Feb 28, 2009 6:55 am

What information do you get from ADP? Do they send you a breakdown of transactions?

GWatkins · Post by **GWatkins** » Mon Mar 02, 2009 10:42 am

Thank you for asking.
ADP sends us a break down that looks like this:
Earnings- gross salary housing
Fed. Taxes- ss/med, fed wt.
State/local taxes- in state, C-02 and then the thing i have in question...
TAXES ADP responsibility (fed. dep., state income tax) $$$$ and this amount is autom. w/d from churches cking acct.

JohnDMeyers · Post by **JohnDMeyers** » Mon Mar 02, 2009 11:03 am

Stephanie:

If I understand correctly, ADP puts money into your church's bank account that you owe for employee taxes. (you said they debit your checking account which shows up on your bank statement).

For receiving the money from ADP:
DB checking $total
CR a liability account - Fed W/H $Fed W/H
CR a liability account - State W/H $State W/H

When you send a check for Fed W/H
CR checking $Fed W/H
DB liability - Fed W/H $Fed W/H

and similar when you cut a check for State W/H

GWatkins · Post by **GWatkins** » Mon Mar 02, 2009 1:00 pm

I hope i'm not too confused but i believe ADP w/d the money and pays our employee taxes

GWatkins · Post by **GWatkins** » Mon Mar 02, 2009 1:05 pm

John
Thank you for taking the time to help me understand. Maybe i'm using some terminology wrong in accounting. ADP withdraws money from our checking and it is their responsibility to pay the employee taxes. Is this making sense?

JohnDMeyers · Post by **JohnDMeyers** » Mon Mar 02, 2009 1:11 pm

Then your situation would be very similar to another thread on this forum where I see you were also involved in reading the articles.

Credit 1110 Checking Account 3,620.74
Credit 2230 Payroll Taxes Liability 439.41
Credit 5085-005 Dental Insurance Deduct 12.14
Credit 5255-005 Staff Dental Insurance Deduct 43.30

TTL 4,115.59

Debit 5071-001 Community Pastor Salary 1,250.00
Debit 5081-001 Music Minister Salary 1,250.00
Debit 5091-001 Youth Pastor Salary 500.00
Debit 5155 Office Manager Salary 967.20
Debit 5315 Payroll Accounting Fees 74.40
Debit 5321 Employer Taxes (FICA) 73.99

Ttl: 4,115.59

Your accounts should probably be very similar to this.

GWatkins · Post by **GWatkins** » Wed Mar 04, 2009 9:35 am

John,
Thank you, but can you help me one more time? The thread information you sent me which module should i use? Payroll? Is it a separate transaction from creating payroll checks?

JohnDMeyers · Post by **JohnDMeyers** » Wed Mar 04, 2009 9:51 am

You could set up employee pay items in Payroll, but at that point, you're doing all the work that you're paying ADP to do.

I think you can make the entries using Fund Accounting to keep your records up to date.

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Re: payroll tax payments

Re: payroll tax payments

how my payroll outsource reports