The company I work for is starting a 401K with employer match and a profit sharing plan. I need to know how to set up an account in chart of accounts (which type account?) for each and how to record them from oustsourced payroll.
You don't need more accounts. If you want to track the employer share separately, go ahead and make one expense account for Employee Benefits, if you don't already have one.
Then, in Payroll, you make a new payroll item; choose EZ. Now you follow the steps.
Please see my attachments; I show the 401 and 403 setup.
"I am using an outsourced payroll company"
The Employee amount is no different than their share of their taxes.
The Employer amount is no different than your share of taxes. I don't know if you are managing this as liability, expense, some of each, or if your Provider manages this via "tax impound."
And the Employer 401(k) item, if the payroll service isn't including this, you don't need to, either. When you Pay it, it can be Expense. Or, you did accrue it first, so that makes it liability In and liability Out. Example:
Payroll results in you needing to send $3,000 of Employee funds to the 401(k) service + your own share as Expense. That works fine.
thanks- Does the 401(k) employee and employer match need to be coded any specific way? Im thinking the employer match would just go in as an expense and the employee contribution as a current liability- or do we even need to account for it seeing how the payroll company already is?
Your own topic is elsewhere; here:
You don't post Liability, unless the Employer is responsible for the Banking to pay out funds, later.
The employee share is from their Gross; that is already in the Gross. There is no further Expense for it. The employer share is no different than Employer share of taxes.
Please see your own topic.
Hi there, @BICIUSA.
The EZ set up is found when you create a payroll item. Let me provide some details.
When you create a payroll item, you’ll be prompted to choose between EZ set up and Custom set up. The EZ set up, automatically creates the payroll item for you. While the Custom setup lets you manually enter the payroll item information.
The one mentioned above is the EZ set up. Here’s how you can create the payroll item:
Please reach out again to us if you have any questions about creating a payroll item. We'll be here to assist you.