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Company I am working with has a PEO who pays invoices, employee tax, employee benefits, etc  

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Joined: 4 weeks ago
Posts: 3
22/08/2020 10:16 am  

Assuming the PEO is the owner?

Joined: 4 weeks ago
Posts: 3
23/08/2020 2:36 pm  

Good afternoon,

Let me try this again.  I thought PEO was the owner.  I can see this is the service provider.  Below is the journal entries that should have been posted for the payroll transaction and the FEB prepayment.

You are questioning the debit on the income statement that you have labeled as "collection".  This item is correctly reported in the expenses from what I can tell.  Sometimes companies add this into wages expense instead of separating it into another GL.  That is because they want to see what portion of wage expense is the EE taxes collected.

I notice in the payment you made for $144,029.24, you didn't include the contractor pay.  That means it was paid on another transaction or there should be a liability remaining on the balance sheet to pay it in the future.  I couldn't tell from your notes.

The February prepaid should be adjusted in February when you create the new payroll transactions for that period.


Payroll journal entry Debit Credit  
Contractor Expense 11158.33    
Wages Expense 47199.19    
Benefit Expense (prepaids) 3618.07    
Benefit Expense (family leave) 195.5    
Wage Expense EE Taxes (collection) 21384.97    
Wage Expense ER Taxes 8601.74    
Prepaid Health, Dental, Vision ( FEB ) 10713.3    
Benefit Expense (WC) 218.74    
Contractor Payable   11158.33 due (wasn't included in the Payment you provided for view)
Wages Payable   47199.19 due
Prepaid Health, Dental, Vision   3618.07 paid / clears 3093.07 & 525.00
Benefit Payable (family leave)   195.5 due
EE Taxes Payable   21384.97 due
ER Taxes Payable   8601.74 due
Benefits Payable ( prepaid for FEB)   10713.3 due
Benefit Payable (WC)   218.74 due
  Debit Credit  
Payment of Payroll & Other      
Wages Payable 47199.19    
Benefit Payable (family leave) 195.5    
EE Taxes Payable 21384.97    
ER Taxes Payable 8601.74    
Benefit Payable (FEB) 10713.3    
Benefit Payable (WC) 218.74    
Other Expenses (total of all other) 55715.8    
Bank Account   144029.24  

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