 In this presentation we will take a look at the payroll tax expense journal entry focusing in on the employer portion of payroll taxes. To do this we will have a worksheet for the payroll tax expenses. We'll be using numbers from a register type worksheet but note that the payroll taxes for the employer portion are typically thought of as a worksheet outside of the register in that in other words the register is going to give us that information to get to net income from regular pay and that is going to be that type of worksheet which will help with the journal entry to record the payroll taxes for the employee portion that they owe but not the employer taxes or the employer taxes will typically have a separate worksheet where we will calculate the employer portion which will be similar in some cases and differ in others. So let's take a look at the register we're going to have the normal pay the total pay we've got four employees here represented by these four totals we're looking at the total for the employees and we're going to be recording this information as a net sum rather than four different journal entries for each employee then we have what was taken out OASDI of the wages for the employees the HI Medicare Social Security Medicare FIT federal income tax group insurance union dues 401k net pay that's what was taken out on the employee journal entry now we're looking at the employee or tax journal entry where we will also have again OASDI our portion of social security which will match the employee portion and note when I say our portion we're and we're going from the perspective that we are the employer here so where the employer this is the employer portion our portion here which will match the employee portion same for the HI or the Medicare this is going to be the employer portion that is due which will match the employee portion so those two there's going to be an employee an employee or portion note that this is coming out of the paycheck whereas this will be the same amount but not coming out of the paycheck and it will be coming out of the employer checking account and then we've got Futa and Suta Futa is going to be an employer only tax so this amount we don't see up here we're probably less familiar with it it's not coming out of net pay we don't see it on our pay stub when we get the calculations for our net pay it will be coming out of the employer side and then Suta will differ from state to state but they're related will typically have it will have an employer portion to it and it may have an employee portion depending on the state state laws could differ from state to state so this is the one we're going to use in order to create our journal entry here if we go to this worksheet and start to build our journal entry based on a trial balance what's going to happen is we're not going to pay cash our first question is cash affected not yet we haven't yet paid it we're incurring this expense as payroll is being processed so we will have a payable account i mean an expense account for the payroll taxes payable and the other side of it will be the liabilities what we owe so we're going to owe OASDI HI Futa Suta we have not yet paid them because we haven't we haven't gotten to paying them yet so cash is not affected we have a payable we are incurring an expense so here's the expense this is going to be a debit balance expenses are it's going to go up in the debit direction so the first thing we can see is that expense now this is summing up these four i'll get to this total at the end and we'll sum it up again but just note that it will be an expense here increasing this amount also note that this is the payroll tax expense which will be part of the payroll process but is different than the salaries and wages expense and this salaries and wages expense includes the payroll taxes that are going to be paid by the employee in other words this number that we're calculating for payroll taxes only is the employer portion of payroll taxes does not include the employee portion then we're going to put a credit for everything that we're going to owe those will be liability accounts so we've got accounts 215 which is the OASDI or social security which will go up then we have the HI or Medicare that we're going to increase the liability form then we have the Futa federal unemployment tax which we're going to increase our liability form these coming directly from our worksheet here to increase the liabilities then we're going to have the Suta which will increase for the liabilities we'll take a look now at the general ledger so we're going to see this data now posted to the general ledger so here's our journal entry and if we look at the gl we can see a little bit of detail and it's it's interesting to see some of the detail to some of these accounts so if we were to look at the payroll expenses we see that the payroll expense started at zero and then we're going to debit it so we're taking this debit down here four thousand seven thirty three forty eight and it's going to increase it to that balance of four thousand seven thirty three forty eight and then we've got the uh two fifteen which is OASDI which we are crediting three thousand thirty one fifty five here's the OASDI before this journal entry it was at three thousand thirty one fifty five we are increasing it by three thousand one thirty three fifty five in the credit direction to six thousand uh sixty three ten note that we these two represent the employee portion the portion we're not putting here on this journal entry and then the employer portion so we owe a total of the six thousand sixty three after the employee and employer portion uh but we're focusing here on the employer tax uh calculation or the employer journal entry then we've got the hi seven oh eight same situations medicare so it was at seven oh eight ninety nine we increased it by seven oh eight ninety nine in the credit direction to one thousand four seventeen ninety eight so these two represent once again the employee portion and the employer portion then we've got the footer which is going to go from zero up in the credit direction by one twenty five thirty eight to one twenty five thirty eight and then finally SUTA which is going to go from zero up in the credit direction by uh eight sixty seven fifty six uh two eight fifty eight sixty seven fifty six so those are going to be our components now these two of course only have an employee portion so we don't see this doubling up as we do with the FICA taxes these two only having one component that being the employer side so if we go back to our trial balance we can see that we are in balance we can see that the the debits in non-bracketed or positive numbers minus the credits in bracketed numbers will uh equal zero that means debits equal the credits the effect of this journal entry then is this increase to the payroll taxes expenses that went from zero up to four thousand seven thirty three forty eight so note that's going to be different than the salaries and wages expenses here which were recorded in the prior journal entry and also note that this forty eight eight ninety six for the employee journal entry the one we're not doing here includes the employee payroll taxes so this is not the net check this is this is total check when we look at the payroll taxes then the only thing that's going to be in the payroll tax expense will be the employer portion that we paid for the payroll taxes so that's an important thing to note commonly commonly mixed up we can see up here that we have the OASDI which is going to include both the employee and employer portion these being liabilities that we will then have to pay to the Fed in the future we've got the FUTA and SUTA which are just coming from this journal entry they're not twice that journal entry because they're just coming from the employer portion only the end