payroll tax

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  • Updated 6 months ago
Accountant never put payroll tax in our program, how do I enter it? We've made the payments to the government for the missing amounts, but need to put them into Reckon now. I made the "other current liability" item under chart of accounts, but not sure what to do next. Should it be automatically calculated each week? 
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Annie

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Posted 6 months ago

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Annie - you should seek advice from a qualified Accountant.  But best I understand, Payroll Tax is a tax deductible, claimable expense taxation wise,  and the entry is usually a journal entry at the end of the month in question,  between EXPENSE act,  and the Liability Acctg.  Then when yopu pay it by the 7th of the following month,  you clear out that liability account with the cheque/payment from the Bank.   That's the way many of our clients do it,  so that the expense represents the month when the wages were paid that gave rise to the liability,  and finally the settlement when you ultimately pay it.  

My unsolicited OPINION:  It is one of those negative incentive taxes - the more people you employ to keep this economy in the workforce, the more the State Revenue Office penalises you at 4.85%!   (Sorry,  just had to share that with a fellow business owner who cares!)   At least it is tax deductible as a business expense.

Check with your accountant, because you may have overlooked the right to claim this in past year if this has been an ongoing bad habit.    But again,  this is just my spin on this, always seek a qualified answer.

GARY
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Annie

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Thanks Gary,