PAYROLL LIABILITIES AND DEFINITION

You should have matching expense accounts under the expense heading Payroll Expenses.

For the taxes that are withheld from the employee's paycheck (the ones you listed) are always booked to a Liability account. Payroll Liabilities would be okay. They are liabilities and not expenses. The company matched taxes get booked to a Payroll Tax expense line with the offset in the Liability account.

Some companies will separate them bwt 2 accounts. One for the state taxes and one for the Federal taxes. This makes it easier to see the amounts that go on the respective forms. I have even seen a third account for just the FUTA to isolate it from the rest of the Federal taxes.

There are payroll companies out there that actually act like leasing companies in that you submit your payroll hours and they handle not only the check writing but they also pay in the withholdings under their own EIN then bill you for their service plus the FICA, FUTA, SUTA & WC portions. If this is the setup the OP is using then there would only be expenses and no liabilities.

Yes it depends on how it is setup.

Most of the payroll setups that I am familiar with merely withhold everything and pay the taxes under your EIN. So until they are paid they are liabilities and should be recorded as such with each payroll period.

How about asking the payroll service AND/OR your accountant?

leasing

their own

The technical term we folks in the accounting biz call your task at hand is to "Gross UP" the payroll. The first decision that has to be made is how often this should be done, every check, every total payroll, once per month, once per quarter, or once a year?

The second is devising the actual mechanics of performing the Gross Up". My best advice is to call in your accountant and have him/her help you set up the procedure. Accountants perform this task often and over time developed fast and efficient methods of doing this. They are also familiar with your company's tax and reporting needs and can guide you in just how much detail must be accounted for. Over time if set up properly you can save yourself hundreds of hours of work by getting professional advice at the begining.

The third-party is already "grossing up" the payroll. The OP is just trying to determine how to record the taxes and liabilities in QB. She's not trying to do the payroll herself.

I always thought that when you have a third party do your payroll that you have to do all the calculations. Live and learn.

>

Take a look at PayCycle:

It integrates with QB nicely. They do all the calculations for you and you just download the info into QB. You pay the taxes but they tell you the information that you need. This is how most 3rd party payroll services work.

This sound to good to be true. All I have to do is pay the taxes and Paycycle pays the rest. How can they stay in business. Must be some sort of scam.

>

They charge a fee for their services. It's not free. Fees range from $20 to $75 per month depending on which service you use (paycycle, ADP, paychex are a few examples) and how many employees you have. The hardest part of payroll is setting it up initially. Once that is done they just receive the number of hours from the company and push the buttons. Some even offer direct deposit so they don't even have to deal with mailing checks back to the company. I know of several bookkeepers that do payroll for their clients but have actually outsourced it to paycycle. No scam.

Sure, no scam. I pay them 20 to 75 per month and they pay my payroll. I'm come bonus time they deliver also.

>

Have you ever done payroll to know how much time/energy is involved? Many people don't want to do payroll because of fears that they will mess it up. Others don't have more than a part time bookkeeper and can not afford the downtime while the payroll is being completed. They would rather let the experts do it. It can be time consuming so for some they feel the extra expense is worth it. YMMV.

"Laura" wrote

That is all true. As well, smaller employers may want that level of privacy, in that, no employee knows what's going on with payroll (for better or worse), who makes what, who has garnishments, who gets what benefits, who has this and that withholding, who got a bonus, who did not.

Keeps the water cooler chit-chat focused on sports, religion or politics.

Additionally, this is the only easy way of getting direct deposit for small companies.

I can think of a few better topics.

Hope you're having fun, Allan. How much longer, do you think, before she realizes you're just teasing?

"Allan Martin" wrote

payroll. I'm

I was wondering the same thing. Once she realizes, he's gonna get a bop on the head.

Would y'all please take this to a single group (preferably one that is interested) and set your follow-ups accordingly? I think it is rude to broadcast such trivia all over multiple groups that are not interested in this chit-chat.

Thanks

I was trying to see just how far he would take it. I'm having fun with him but now the cats out of the bag . All done.

p.s sorry about the x-posting. I did not see the multiple newsgroups.