You should also stay compliant with payroll guidelines, legislation and regulatory requirements. This means keeping up to date with tax rates each new tax year and tracking employee data like holiday allowances, statutory sick pay, overtime, benefits and even stock options. One of the most important aspects of payroll accounting is making sure you’ve calculated wages, salaries, deductibles and taxes correctly – especially for the year end reports.
The result is one place where you can manage multiple services. Payroll liabilities, or payables , are amounts you currently owe, pertaining to your business’s payroll. If you’re using a payroll journal, you enter payables as credits because you are increasing the amount you owe.
Taxes and other deductions are based on the forms your employees fill out. The forms will tell you how much of an employee’s wages you should deduct each pay period. Calculations will also depend on your state and sometimes your city or county. Familiarize yourself with any local tax laws that could require additional payroll deductions.