1. Payroll Liabilities and Tax Records Accounting 1 Ms. Alltucker
Chapter 13
Payroll Liabilities and Tax Records
Accounting 1
Ms. Alltucker

2. Learning Objectives Record payroll transactions in the general journal
Describe the employer’s payroll taxes
Compute and complete payroll tax expense forms
Record the payment of tax liabilities in the general journal
Complete payroll tax reports
Define the accounting terms introduced in this chapter.

3. Journalizing and Posting the Payroll
What you will learn:
How to compute the business payroll deductions
How to record the payroll entry in the general journal
Why it’s important:
Payroll deductions are liabilities of the business. It is essential that payroll deductions are journalized and posted in a timely manner.

4. Journalizing & Posting the Payroll
After payroll is prepared—a check is written to transfer the total net pay from REGULAR checking account to the PAYROLL CHECKING account
All payroll checks are written from PAYROLL CHECKING account only

5. Analyzing the Payroll Transaction
Employee earnings are a normal operating expense of a business
Salary expense—expense account used to record employees’ earnings
Debit is the increase side
Income and FICA taxes are withheld from gross earnings and retained until it is time to pay the government agencies
Each type of payroll liability is recorded in a separate account

6. Payroll Liabilities Employees’ Federal Income Tax Payable
Medicare Tax Payable
Hospital Insurance Premiums Payable
US Savings Bonds Payable
Credit Union Payable
Union Dues Payable
United Way Payable
** the difference between gross pay and net pay employer’s payroll liabilities

7. Business Transaction
Roadrunner’s payroll register is the source document for the payroll journal entry.

8. Business Transaction JOURNAL ENTRY
Using the totals from the payroll register Debit Salary Expense and credit
All of the deductions from the payroll register totals

9. Posting the Payroll Entry to the General Ledger
Review on page 319 on how to post to the general ledger
DO NOT FORGET
Post reference numbers on the journal and the ledger pages