How To Set Up Payroll Accounts
What you need to know:
Payroll accounts define where payroll-related expenses, deductions, and liabilities are posted in your chart of accounts. If you add new pay types, benefits, or deductions, you may need to create additional payroll accounts. Maintaining these accounts correctly ensures payroll transactions are posted accurately and your financial reports remain reliable.
What you need to do:
Review your chart of accounts to find your salary expense group(s) to determine if an existing account will fit your needs or if a new account is required.
Determine if you need to set up both arm’s length and non-arm's length accounts for your new account.
How to (Step by Step):
For pay types and benefits:
Select Chart of accounts.
Select Expense.
Click Add account beside either your Salaries & Benefits (Arms Length) or (Non Arms Length) group.
Enter account Name.
Enter a Default description for the account which will be added to a transaction every time you select this account and will show on reports.
Use the drop-down menu and select the appropriate code to add this expense account to the T1163 / T1273 report.
Tip: There are two codes for salary expenses, one each for arm’s length and non-arm's length.
Use the drop-down menu and select the salaries code to add this expense account to the T2042 report.
Click Save.
For deductions involving remittance to a third party:
Select Chart of accounts.
Select Liability.
Click Add account beside your Source Deductions Payable liability group.
Enter account Name.
Enter a Default description for the account which will be added to a transaction every time you select this account and will show on reports.
Click Save.
References and Additional Resources
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