USA Deferred Payroll

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As a continuation of this thread, we are a startup company with an opening date within the next 1-2 months. Some construction costs that were mandated by various government agencies have caused us to overrun our original budget, so we're looking at two stop gap measures until we get some cash flow.

1) We're taking on a short-term loan as previously addressed.
2) A couple of our full-time salaried employees have agreed to defer their salary until we open.

My question is how I should account for the deferred payroll on our books. I assume that I should be making an entry every 2 weeks (our payroll is run bi-weekly) to account for the base salary and payroll taxes. Generally, the payroll taxes can be estimated but every now and then I notice some of the line items are pennies different than the prior payroll period.

Would these be the correct entries to make:
Dr: Salary Cr: Salary Liability <to account for deferred base salary>
Dr: Payroll Taxes Cr: Payroll Taxes Liability <to account for deferred payroll taxes>
Dr: Salary Liability Cr: Cash <when salary is paid>
Dr: Payroll Taxes Liability Cr: Cash <when payroll taxes are paid>

Or instead of using my standard expense accounts for Salary & Payroll Taxes, should I be creating new GL accounts specifically for the deferred portions?

Thanks for your assistance!
 

Samir

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It depends on when you want to record the salary as being 'paid'.

If you want it to be recorded as paid on time, you will need to only have a salary payable for the net value of the check. All other payroll and wage expenses will be recorded like usual.

If you want to defer the recording of the salary until it is paid, you will need to have a salary payable for the gross amount due to the employees, and then when the actual payments are made, you can do all the deductions then.

Hope this made sense.
 
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Samir,

I would prefer to defer the recording of the salary until it is paid. I am a bit confused as to what my entries will look like if I'm recording the gross amount (salary + taxes) in the salary payable entry.

Thanks
 

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