Payroll

[Derek Atkins]

Phil Longstaff <plongstaff at newearth.org> writes:

> If my company pays an employee $50,000 in gross salary and an additional
> $5000 in employer taxes, then the cost to me is $55,000, regardless of
> how the employee's $50K gross salary is split into taxes and other
> withholdings.  The expenses I have are the $50K salary, and the $5K
> employer taxes.

Aha, I see what you mean, now.  The company expenses are "employee
gross salary" and "additional company payroll taxes and paid
benefits."  That makes sense..

> I reread what I wrote, and you're right.  I meant to say "the various
> taxes ... are not expenses for the company".  If the company holds them
> to pass on to the gov't, they are liabilities at that point.

Right...

> However, given double-entry accounting, it should be straightforward to
> set up accounts to allow you to generate W-2's (you'd need a deep enough
> account hierarchy to allow you to keep info per employee).  I agree that
> functionality on top of the basic double-entry accounting makes the job
> easier.

Well, personally I would prefer not to require an account per employee
(similarly to how I didn't want an account per customer or account per
vendor for AR and AP).  However, obviously this requires some
ancillary information which isn't currently available (e.g. a real
Payroll system).

> See above.  I mean't they aren't expenses (to the company).

Right, I see now... Thanks!

> Phil

-derek

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
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