Payroll

[Phil Longstaff]

Disclaimer: IWNEAAABIANWAO (I was not educated as an accountant but I am
now working as one)

On Wed, 2003-07-23 at 11:14, Derek Atkins wrote:

> Why can't you have a transaction that looks like this:
> 
> 2003-01-15      Derek Atkins
>                 Expenses:Salaries               $85
>                 Expenses:Tax-1                  $10
>                 Expenses:Tax-2                  $5
>                 Liabilities:Tax-1       $10
>                 Liabilities:Tax-2       $5
>                 Assets:Checking         $85
> 

Unfortunately, this is wrong.  For one thing, the proper amount to hit
Salaries with is the gross salary.  Secondly, the various taxes or other
things withheld from my gross salary to produce my net salary are not
liabilities for the company.

If I have a gross salary of $100 from which $10 needs to be withheld for
tax1 and $20 for tax2, then we have:

                               DB          CR
Expenses:Salaries            $100
Liabilities:Tax1                          $10
Liabilities:Tax2                          $20
Liabilities:Employees:Phil                $70

Then, when the employee check is cut:

Liabilities:Employees:Phil   $70
Assets:Current Assets:Bank                $70

Note: I wondered about the Employees liability, but decided that it was
used for net pay.  If Gnucash would be used to record activity after
checks are written, then the Employees liability account can be removed
and Assets:Current Assets:Bank can be credited directly.  Another
alternative would be to tie 

If the taxes have an employer part as well, then you need to add:

Expenses:Tax1                $50
Liabilities:Tax1                          $50

Phil