SHOPKEEPER > ACCOUNTING

PAYROLL

Below are some tips on how to record payroll checks and

deductions.

Choose the Write a Check option, and make the check out for the

Net Amount of the payroll check.

If you have seven or fewer deductions, you can enter the entire

payroll check on the same screen.

In the first expense code slot, type in the expense code for

Salary & Wages, and for the amount type in the GROSS (pre-

deduction amount). Make this amount positive (not negative)

In the second slot, type in the amount (negative) and

account code for the first deduction. This likely will be a

200-series liability account, such as Federal Taxes Payable

because, even though you aren't paying it to the employee,

you owe the government that amount.

If necessary, fill in the third through eighth slots in the same

manner as the second slot.

For example, if you have a check for gross wages of $500,

but net wages of $400, you would post $500 to the Wages &

Salary expense account, and could post -$60.00 to the

Federal Withholding liability account, -$25.00 to the State

Withholding liability account and -$15.00 to the State

Disability liability account.

If you have several checks to post this way, you could post

one check for the net amount of each check, and just one

general journal entry to account for the combined

deductions. This would avoid having to enter all the details

for each payroll check.

Note that the entire Gross Wage amounts will appear on your

profit & loss in the period you enter the transactions. If you

don't pay off the tax liabilities until the following month,

those payments will not appear on the following month's profit &

loss, but the balance sheet of the following month will show

reduced liabilities and reduced check book balance.

To record the employers matching contribution, you will need to

enter a general journal entry. Again, you could enter one per

employee or one for the whole pay period.

The second General Journal entry could be:

$10.00 - Employers Matching FICA expense {6,7,8,9}

-$10.00 - Employers FICA due {2}

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$ 0.00 - Net journal entry = zero