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Frequent Explorer *

Contributions via payroll

When we run payroll and want to reinvest a part of our income back into the company, is making a journal entry to move the deduction from payroll liabiltiy, which is currently the only way to withhold the funds from the paycheck, to the Equity Contribution account the only way?

3 Comments
Established Community Backer ***

Re: Contributions via payroll

No, any deduction  for any purpose can be withheld from net pay upon agreement of the employee.

 

Please verify that you are in fact a S Corp or LLC electing to be taxed as a corporation in order for ay owner to be on payroll. And since you effectively are not a member but a shareholder your equity contribution might have to labeled as purchase of shares.

Frequent Explorer *

Re: Contributions via payroll

We know that what we are doing is correct.  I'm looking for the machanics behind what I'm doing within QBO Payroll.  I appreciate you letting me know that there isn't another way.  Maybe that's something they can add for the future.

Established Community Backer ***

Re: Contributions via payroll

You can set up voluntary payroll deductions as per the attached https://community.intuit.com/articles/1770957-set-up-voluntary-deductions-in-online-payroll and assign the value as zero, but the destination account as your owner equity contribution. Then each payroll adjust the voluntary (after tax) deduction to equal net pay - resulting in a zero dollar paycheck.