![]() These entries include your employees’ gross earnings and withholdings. It’s the first entry you record to show a transaction has occurred. ![]() The most used entry is the initial recording, also known as the originating entry. And there’s a different use for each type. Small business payroll accounting uses three basic types of journal entries: initial recording, accrued wages, and manual payments. But a record of tax payments will show unemployment taxes listed alongside any taxes the employee paid. Those are among their employer’s responsibilities. For example, employees don’t pay unemployment taxes. These include taxes the employee is paying via their withholdings each pay period, as well as taxes the business owes. This goes back to journals 2 and 3 where you’re recording all taxes you’ve paid. For transparency and visibility, employees can find these deductions on their pay stubs.ĥ. In that journal entry, you’re recording all of the deductions you have to take, as a business owner, from the employee’s check. Familiarize yourself with any local tax laws that could require additional payroll deductions.Ĥ. Calculations will also depend on your state and sometimes your city or county. The forms will tell you how much of an employee’s wages you should deduct each pay period. Taxes and other deductions are based on the forms your employees fill out. Calculate taxes and other deductions based on compensation.
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