Hello all. This is an excellent accounting software that can rival the big boys.
I hope someone can help me here.
For employee payroll in the USA.
I created the following Liability Accounts:
Federal Income Tax
State Income Tax
I created the following Expense Accounts
Payroll Wages and Salaries
When I run payroll. I deduct from the employee’s federal, state income tax and the employee’s portion of social security and medicare tax. The employer also pays a percentage of social security, medicare and federal unemployment and state unemployment. However, in Manager, there is no way to add the employer contributions withholding when running payroll. In other words, those employer’s payroll expenses should go from payroll taxes to the liability accounts.
Then when I pay the IRS for the withholding from the employee and employer, I pay from the checking account and deduct the liability.
Also, if this feature is added, in the employee’s payslip (paystub), should not report the employer’s portion of taxes.
Another request/feature that others have requested - is the ability to add percentages for federal, state, social security and medicare on the calculations when you run payroll. These can be 5% of income for example.
Another feature is the ability to print a check directly from Manager. In other words, it can generate a pdf of the check and the payslip and we can place a blank check in the printer and print the pdf. This would be great.
Sorry for the long post but I hope I get some guidance.
This is how we do it in a similar situation for Canada where employer pays for CPP contributions.
Under the Payslip items, we have a Payslip Contribution Items, named, Employer CPP Contribution, assigned to Expense account -Salary, and Liability account - Source Deductions Payable. Employee contribution of CPP is also assigned to Liability account - Source Deductions Payable.
This is quite a handful. It’s generally recommended that each topic is focused on a single point/request and this is to ensure that each topics gets its fair share of discussion.
Anyway, regarding the payroll taxes. I’m not sure if I understand your request.
There’s the deduction section where you can make deductions credited to the liability/expense account of your choice and there’s the contribution section which is in effect a debit to an expense and a credit to a third-party liability account.
I think that this is enough to achieve any accounting treatment.
In your case, withheld payroll taxes–as I understand–is the amount deducted by the employer from the employee so you should define a Payslip Deduction Item following this guide.
As for this:
there’s currently two separate ideas for that:
And for this:
It’s not something that’s likely to implemented anytime soon. You can search the forum for similar topics.
Got it. Thanks to all for the prompt reply/post. And sorry for placing so many items to discuss in one post (newby here).
I initially thought about adding the employer contributions per agtms suggestion but I was reluctant to do so because that would show on the printed payslip. Usually employer contributions for payroll taxes (i.e., medicare, social security, unemployment) are not printed on employees payslips. Only if it is an employer match for a retirement account or pension. I wish Manager would disable the feature to print the payroll taxes paid by the employer from printing. But I guess there is no harm if the employee sees these numbers.
Ealfardan - it is a payroll tax expense that when payroll is ran it goes to liability so that later when a payment is made to the tax authority, it is paid from the checking account and it reduces the liability but the expense has already posted when we ran payroll.