How to set up Net Salary with deductions like Social Security and Medicare


When I have a payment I usually show a value of cash paid out to the employee but account the deductions to be credited to a holding account as a credit balance. ex,

Debit Salary 10000
Credit Cash 9500
Credit Social Security 500

(I am trying to simplify the transaction ).

Presently I use the Purchase Invoice menu to do it which I know is wrong but it is because I couldn’t figure out what else to use.

What I do is I will let it deduct cash on hand and then I will enter Salaries and wages 10000 and then Social Security -500 to get the net effect of paying out 9500 only…but when I see the Liabilities on the Balance sheet it will show -500 which is not what I want. I need to know how to recitfy this

Maybe somebody can show me how this is done ?



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Read the Guides about Payroll:

Thank you