This sort of depends on what all is happening with your payroll, and to what
extent the payroll service is handing things.
In a pure situation, you have the gross wages you pay, plus your FICA match,
FUTA, state unemployment and probably the processing fees the payroll
service charges you. Since the payroll service is handling payroll tax
deposits, you won't have to worry about tracking any payroll liabilities -
your journal entries will only be hitting expense accounts. Employee-paid
taxes you don't have to worry about - gross wages just debited against your
wages expense account (and/or Salaries expense account depending on your
chart of accounts). Company-paid taxes will be debited to your Payroll Tax
Expense account, and the payroll service's processing fees will be debited
to an expense account of your choice (e.g. Legal & Professional Services).
Let's say you have $1,000 gross payroll per pay period. On top of that
you've got another $150 for your FICA match, FUTA, and SUI. And the payroll
service charges you $50 to process. Your journal entry would look something
Account Debit Credit
10200 - Checking 1200.00
77500 - Wages Expense 1000.00
72000 - Payroll Tax Expense 150.00
68500 - Legal & Professional 50.00
Naturally, if your company has an accountant they work with, it would be
good to confer with them to make sure you're hitting the accounts they want
. . .
Chad A. Gross - [SBS MVP]
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