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Paying company contribution as a liability instead of an expense

Our company started offering health insurance this year, part company paid and part employee paid. I've created a Liabilities Schedule for the portion the employee contributes/has withheld out of their paycheck. However, I cannot figure out how to pay the portion that the company contributes other than through Bill Pay. Is there a way to record this as a Liability and associate company expense with each individual employee? I want to be able to track the expense and it show up on our P&L.

 

Thanks in advance.

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Best answer 05-02-2019

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Re: Paying company contribution as a liability instead of an expense

The way we handle is simpler
1. The company enters and pays 100% of the vendor bill as a 'normal' AP bill.
2. Employee contributions are coded in payroll with an item that links to the same expense expense account as used on the vendor bill - this causes the payroll witholding to credit (reduce) the expense and the remaining expense is the company portion.
3. If there is any non-cash benefit associated with company-paid insurance that is a separate itme and entry in paystubs which has no effect in GL.
4 Comments
Highlighted
Established Community Backer ***

Re: Paying company contribution as a liability instead of an expense

The way we handle is simpler
1. The company enters and pays 100% of the vendor bill as a 'normal' AP bill.
2. Employee contributions are coded in payroll with an item that links to the same expense expense account as used on the vendor bill - this causes the payroll witholding to credit (reduce) the expense and the remaining expense is the company portion.
3. If there is any non-cash benefit associated with company-paid insurance that is a separate itme and entry in paystubs which has no effect in GL.
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Re: Paying company contribution as a liability instead of an expense

Thank you! This seems like it's going to solve my issue.

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Re: Paying company contribution as a liability instead of an expense

May I ask how you "coded" the payroll accounts to get the bill to "reduce"? The way it shows up on the P&L now it's not reducing/washing the accounts. Thanks!

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Re: Paying company contribution as a liability instead of an expense

May I ask how you "coded" the accounts? I tried what you recommended but I'm not doing something right. On the P&L you can see that the accounts aren't reducing/washing each other out. Thanks!

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