How do you incorporate tax you deduct in a payment, as opposed to tax paid in a payment?
e.g. If I need to pay a correspondent a fee, I have to deduct withholding tax from the fee amount.
So, say I have to pay a correspondent $2000. I need Manager to reflect the withholding tax - say 15% deductible tax.
$2000 minus $300 (withholding tax) = $1700 (due to the correspondent).
Please forgive my ignorance - I m not used to doing accounts and have had to step in to update our accounts system!!!
Withholding tax is not yet supported for purchases in Manager. This means you will need custom liability account and simply enter negative amount representing withholding tax on payment (or purchase invoice) to decrease total paid (or total payable).
Thanks.
I’ve tried that - entering a negative percentage. However, the deducted tax
doesn’t appear in the taxes due to government.
Not sure what you mean by negative percentage. Can you show screenshot how you are recording it?
Lubos,
My sincere apologies for troubling you. As you will se from the attached
pay slip, the tax is deducted from the payment. Howeverm when I go to
:Summary" the tax that was deducted appears in “Suspense” rather that the
tax column. I just can’t figue out how I can get that tax to show up as tax
I owe the government.
Payslip.pdf (75.2 KB)
Wait a second, I thought you are talking about tax deducted at source for purchases.
When it comes to payslips, withholding tax is a deduction so it looks like you have it right.
As for why the deducted amounts goes to Suspense, go to Settings tab, then Payslip Items and edit your deduction to specify which account those amounts should be posted to.
My sincere apologies for troubling you.
I’ve created a withholding tax (-15%) and entered it and the payslip
indicates the tax has been deducted,. Howeever, when I go to summary, the
deducted tax appars in “Equity-Suspense” and NOT in Tax (payable).
@Dennisrounds, Lubos already gave you the answer!
Did you do what he told you? If so (which I sorta kinda doubt), please post a screenshot showing your Settings > Payslip Items configuration.
Can’t understand how it gets to “Equity - Suspense”, because Payslip Deductions Item has a default Payroll Liabilities account which can’t be deleted at either the Payslip Deduction Item or the Chart of Accounts locations
That’s a good point. Maybe he didn’t select Deduction item when creating payslip? That would explain why deduction would be posted to Suspense.