I've changed jobs from a company that used assisted payroll (Intuit did all the liabilites) to a company where I have to do it all myself. I'm having issues with payroll liabilities. specifically the fact that the amounts never match what we actually pay. any guidance is appreciated. ie.. Set up, managing etc.,
Our Employee Health Plan and IRA contributions never match. Please Help.
My first thought in reading your question was that probably you are not including the company’s matching Social Security and Medicare that do not show up on the payroll stub but have to be reported on the 941. But if you have been doing payroll with QuickBooks in the past, you probably already know about that requirement.
So let’s begin with the basics. First make sure that you have all the accounts in your chart of accounts that you need to have in order to do manual payroll.
The following is minimal list of the accounts you will probably need to generate payroll manually and record it in QuickBooks. Those marked with W* will appear on the employees’ W-2s and the company’s W-3s.
Profit and loss expense accounts
Company share of Social Security
Company share of Medicare
Balance sheet payable accounts
W* Salaries earned
W* Wages earned
W* Federal Income Tax Withheld
W* State Income Tax Withheld
Social Security Payable (with two subaccounts)
---- W* Social Security Withheld
----Company share of Social Security
Medicare Payable (with two subaccounts)
---- W* Medicare Withheld
----Company share of Medicare
Note that there are other deductions from the paycheck that you may have to account for but strictly speaking are not payroll expenses. All will be in the payable section of the balance sheet. The following is not intended to be an inclusive list but just some suggestions:
Child support withheld
Note that since each of the above can vary by employee, you will need some method of tracking and reporting how much is withheld from each employee. Subaccounts may be very helpful. So are Excel spreadsheets.
In addition, there are some expenses that the company may pay for the employee, such as health insurance, that are not payroll expenses but are treated as you would treat any other company expense.
If you have the basic framework in place, the best than we can do at this point is to ask where the discrepancies are found. Further questions on your part are completely appropriate.
Lorin Browning, Ph. D.
Fellow -- National Tax Practice Institute
Last edited by Lorin Browning; 03-23-2016 at 12:12 PM.
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