 In this presentation we will record employer taxes with a journal entry getting our information from our worksheet here then recording the journal entry into the general journal posting to the general ledger and creating the trial balance. Support accounting instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a u2 page. We also include added resources such as excel practice problems pdf files and more like quick books backup files when applicable so once again click the link below for a free month membership to our website and all the content on it from it so this is are going to be our worksheet here it's linked to our payroll register now when we think about the payroll register we typically think of what what we need or the support to creating the the payroll journal entry which we've already done here meaning we already recorded the journal entry for the net pay which includes total pay minus all the deductions and now we're going to do the employer portion of payroll taxes this can be confusing because you you see here that some of the deductions are of course payroll taxes so what are we talking about to have a separate journal entry these payroll taxes remember are taken from the net check of the employee in in theory from an accounting standpoint have been paid by the employee even though the employer is the one actually doing the the handling the transaction meaning the employer is the one taking the money out and writing the check to the government however they're taking it from in theory the employee's money out of the employee's paycheck so it's coming from the employee's page and the reason I say that is because if there was no payroll from an economic standpoint there's kind of a debate as to what the real effect of payroll taxes are if there were no payroll taxes would total earnings be the same or would the the negotiation of compensation differ probably differ somehow some way but in any case the concept here is of course that we have total earnings and then the wages for these taxes are coming out of total earnings then the employer is going to have to pay their portion of of the payroll taxes which is over and above that which includes OASTI and HI social security and medicare which are the same as what's being pulled out but the same amount but they're twice that much so we're basically have the employee portion and the employer portion and then we have FUTA and SUTA FUTA is going to be an employee tax only SUTA is typically tied to FUTA in some way and almost every state has SUTA so we're basically going to put this in even though we're not concentrating on any in particular state also note that these employer taxes are not typically part of the register but the register can be used to make our worksheet here the register typically being thought of as the information to get basically to the net income calculation but we're going to use the same information to get our payroll taxes so we're just going to use these to create our journal entry now so we're going to go back to this one or your first time we're going to the general ledger tab and we've already done our payroll journal entry debuting wages expense taking out all the stuff that the employee paid and crediting the cash now we're going to do the employer portion is what we're working on here and if we scroll down the first thing that's going to happen is we're going to have payroll expenses payroll tax expenses so we've already recorded payroll expenses that's the employees payroll now we've got the payroll tax expenses which is our tax that we have to pay for having employees in essence so if we copy this cell it's going to be a debit we're going to increase it with another debit that's going to be the start of our journal entry we're just going to right click and paste 123 now that's going to be the debit we haven't I'm not going to put the amount in we're first going to do all the credits and then the amount will be like the plug so we haven't yet paid the employee so it's not a credit to cash because we haven't paid payroll taxes yet what it is going to be is a credit to the taxes that we owe which as we can see over here if I go back to this other tab it's going to be OASDI Social Security FHI Medicare FUTA federal unemployment tax SUTA state unemployment tax so if we go back over here where are those liabilities it's this one this one this one and this one these two are the same as we had in our journal entry up here because we're going to pay them to the same person but the two journal entries going to it are different because once the employer portion once the employee portion so these I'm just going to copy these right click and copy we're going to put that in underneath here that's going to be our credits right click and paste 123 we could indent these sales if we choose to make it a credit I'm going to go to home tab increase indenting and then we're just going to pick these numbers up from our earnings records over here so to do that I want to make it a negative so instead of equals we're going to say negative and then go to our earnings records and pick up OASDI the first one and then we're in HI we're going to do the same thing I'm going to say negative and then we're going to go to our earnings record and we're going to pick up the HI enter and then for the FUTA we're going to do the same thing instead of equals we're going to say negative and then go to our earnings here for the FUTA pick that up and enter. And then the last one, SUTA. And then we have to stop because it's the only one we got. So we're going to say negative and then go back to the earnings record, pick up the SUTA and enter. So there we have it. Now the debit is just going to be the sum of those. If we were to highlight those, it comes out to 473348. That's what the debit should be. I'm going to do that with our negative sum, our plug formula, which is the negative SUM. Double click that SUM function. We could move this out of the way if it's in the way. It's totally in the way. So we're going to move it up top. And also, if it wasn't the way and you didn't want to move it, you could also just start from the bottom instead of starting from the top. I go like this. Or we can move it out of the way and we can start from the top, which is more natural feeling. Go like that. And then we'll just sum that up. And there's our journal entry, the debits, if we highlight or select to the credits, add up to zero. Okay, so now we're just going to post this out and to our general general journal, our GL general ledger, and then we'll see what happens to the trial balance over here. So the first one's going to go to the account 520. If we scroll down here is account 520. That's where we want it to go. It's in an order. It's going to be in the same order on the GL assets, liabilities, equity, income and expense. So we're going to go to the right. We've got the assets, then we've got the liabilities, then we've got the equity sometime like over here, and then income and expenses. So it looks like it's up top way up here. And the date's going to be on 91. So I'm in BR6 or way over in BR6, we're going to say equals and point to that 473348 and enter. So that makes the balance go up. And there is our information there. If you want to just type in equals D14, you can as well. But I do recommend using formulas. You could not use a formula as well and it'll still work. But it's good practice to use formulas. So I'm going to go to the right. And then we're going to scroll down. And now we want to pick up the 215. So here's 215. Here's 215 here. So I'm just going to scroll to the right to find the 215. And by the way, obviously we have the, you know, it might not be obvious, might look funny here with the screens here are frozen. And that's why it's moving like this. So to freeze the pains, if it's not frozen for you, go to the home tab, go to the views and freeze pains. And that should make it so this side stays here when we go to the right. Okay, so now we're going to go to where were we going 215. 215 is here. 215 is their third liability account. We're going to go to the right looking for 215. 215. Where are 215? Here it is. So it's an AS7. We're going to say 911. And then in AT7, we're going to say equals and point to that 3031 and 55 cents. Note the pattern here. We've got the employee portion from the prior journal entry we did not record that recorded here. And the employer portion for a total of double that amount, which will now be on the trial balance. If we go to the right of the frozen pains, we'll see that here's that amount here. And of course, we're out of balance debits not equaling the credits. Next one 220. So 220 is here on the trial balance. We're going to scroll to the right and see if we can see it over here. 215. 220. So 220 AW7, we're going to say 911 here. Then we're on AX7, where we will say equals, point to the 708.99 and enter. Same pattern here, we got the employee portion, the employer portion, bringing the balance up to twice, the one portion. And if we go to the left of the frozen pains and scroll right, we see that that amount then should be here as well right there. Then we're looking for the 223 FUTA. FUTA is here. 223. We're going to go to the right to see if we can find FUTA. I'm pretty confident we can if we try. So here's FUTA. Date 911. We're in tab BB6, where we will say equals, scroll down. We want to pick up that FUTA amount there and enter. Amount going up to 225.38. If we go right to the left side of the frozen pains, once again, scroll right, then the FUTA amount is now 225.38. One more, the FUTA. So here's FUTA. Here's FUTA 224. We're going to scroll right, so we find 224. And there it is. So we'll scroll down a bit. We're in BA 20. 911 is the date, BB 20. We're going to say this equals and point to that 896.70. 56 and enter. Then we'll go right to the left of the frozen pains and scroll right and we'll see that same amount here. So if we scroll back, we're back in balance here and we can see that net income went down because the expense for payroll went up.