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NicWP9378
Level 1

Payroll journal entry example

I'm really just looking for someone to share an example of a payroll journal entry with tax withholdings and deductions. I can not get my numbers to match the payroll import from the bank. The bank imports has all deductions going to a liability account which I know is not 100% correct. When I try to tie to the bank, the transfer amount from main checking to payroll is more than the bank is saying. Any help would be greatly appreciated. TIA! 

1 Comment 1
BigRedConsulting
Community Champion

Payroll journal entry example

A good way to see how the Journal should look for your payroll is to look at how a the accounting for single paycheck works in QuickBooks. 

 

Here's an example:

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Note that the employee taxes use only a liability account, as would something like the employee 401k contribution, but the company paid taxes like Medicare Company have both a debit to an expense account and a credit to a liability account.  This may be where the bank import doesn't work as banks (oddly) often don't think in terms of GAAP debits and credits.

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