We have a company run payroll for us and they just give us the net amount and we enter that under payroll expense then when it's time to pay taxes we have been breaking the check down as liabilities and when I go to chart of accounts it shows we have that liability. I'm wondering now if we should just be expensing it to payroll taxes instead of breaking it down. We did them as checks not journal entries. When I was trying to research it there was something that said withholding should not be an expense for the company so how would I enter that. I think I am confusing myself by overthinking this.
Does the service co pay your employees directly, or do they just provide you the paystub info each employee paycheck that you then issue?
Either way - if you are recording the check out as a single line entry to 'payroll expense' then you are oversimpliflying. You should be entering at least the breakdown between employee pay, employee tax deductions, and company contributions.