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Level 1

Suppliers Payment

Hi, is there any way to account for Tax at source deducted from Suppliers bill payments. I need to record the Withholding Tax Liability at the time of payment. For example, if bill amount is 1000, I will make the payment of 950 and retain 50 as payable to Govt. treasury. I am unable to find any option for discount etc. while making a bill payment. Please help.

2 Comments 2
Level 15

Suppliers Payment

You would create a liability account for the tax withholding

create a service item named for the tax withholding and link it to the liability account

add that tax withholding item to the bill, enter the qty as negative one (-1) and the amount, pay the balance.


If it were me I would find another vendor where I did not have do backup withholding

Malcolm Ziman
Level 10

Suppliers Payment


If you pay the bill immediately, i.e. you don't use AP, the you can record it as an Expense type transaction, and allocate the withholding to a Withholding Tax Liability account directly in the Expense (no Item needed) as a negative on the 2nd line of the Category Details section, with the 1st line the expense account for the full amount.  If you are adding from the bank feed, then you can split the transaction like this

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