Payroll deduction question

[Julie]

When a Pastor has money deducted from his salary for pension contribution, and the church matches it, how should that be set-up in the Payroll Items for that person?

I'm in a bit of a mess right now and although I think I found a way to clean it up, I am now confused as to how the payroll should be set up. Everything was fine until the summer, when I guess I thought I had it wrong, but all I did was make things worse.

My balance sheet was fine all along, but now when I bring up July, August or September, it looks like I haven't remitted the pension contributions, but I have.

I would appreciate any help you can give me!

Thanks!
Julie Chatten

[Matt]

The deduction from your Pastor's salary should be set up as a item type = deduction. The debit account should be to your checking account and the credit account should be to a liability account. The church match should be set up as a item type = employer's liability. The debit account should be to an expense account and the credit account should be to the same liability account as the deduction. Then, when you cut the check to remit the pension contributions you should have debited the liability account and credited your checking account. Sounds like somewhere along the line one or more of these procedures wasn't followed.

[tborgal]

If this a pretax deduction, such as a 403b, you will need to seperate this amount from the salary. I believe there is an example of how to do this in the manual, but I do not have it in front of me so I can't give you a page number.

[Zaphod]

Handling 401k, 403b, etc in PowerChurch Plus:

http://www.powerchurch.com/support/answ ... icle_id=17

[Julie]

Thanks for answering. Matt, I think I will try what you suggested...it looks like that might be my problem. I neglected to mention that I am in Canada, so we don't have 401k, etc.

My problem lies in how I have it entered into the program in that it isn't showing that I have remitted the pension payments, thus throwing my Balance Sheet balances off because it still shows up there.

Thanks again!

[Matt]

You will need to analyze the accounting entries made when you posted the checks for your pastor's salary and also when you posted the checks for the pension payments, figure out what was done incorrectly, and then do reversals and repostings to correct your balance sheet. Based on what you are describing, I have a feeling that you have expensed the pension payments twice in your records--once when you paid the pastor's salary and a 2nd time when you paid the pension contributions.

[Julie]

Thanks for the help Matt...another crisis solved! I went and looked back on past entries, and realised that I was taking the Pastor's contribution out, but because the church's contribution was coming out of another (wrong) account, my Balance Sheet was still showing money owing for the pension contribution.