 In this discussion, we will take a look at the discussion question of discuss the journal entry related to payroll tax expense. So when we think about the journal entries related to payroll, there are some of the more complex journal entries that we have in all of the accounting. They're typically going to be longer, a bit more complex than most journal entries. Therefore, useful to know, useful to look at, useful to understand, even if we are not working in payroll. So they're good, good work just to learn the journal entries. Now when we go through the journal entries, we typically have a journal entry related to the recording of payroll. And then we're also going to have to record payroll taxes. And those are going to be really different. And that's part of the confusion, because when we record the journal entry related to just processing payroll, recording the payroll expense, not the payroll tax expense, the payroll expense journal entry. And we are withholding payroll, meaning the most simple journal entry for recording payroll if we didn't have any of this business of withholding and all this other stuff that happened, would be just like any other expense. We would just be like, okay, we're going to credit cash because we're going to pay our employees with cash, and then we're going to debit payroll expense. And that would be it would be like paying for normal and like paying the telephone bill would not be difficult. But of course, we are required to do much more than that, including withholdings. So if we were to expand that journal entry for the for the employee portion, we have to take from the employee before we even give them their check, we have to take out from their check before they even get it, what they owe in terms of including payroll taxes. So we're taking payroll taxes out of their wages, in other words. But when we record the expense side of it, we only record the payroll expense, because we owe them, we owe the employee, whatever they earn gross, we owe them gross, not net on payroll expense. And then we pay them net, whatever, whatever the actual check was after what we took out of their check, including the payroll tax withholdings. But they earned the growth that we're debiting to the payroll tax expense. The difference then is going to a liability, because all we're doing is paying someone else for the employees, we're paying someone else on the employees behalf. So that means, although that we're dealing with a liability related to payroll taxes, we're not really dealing with payroll tax expense. When considering the payroll tax expense journal entry, we're really only considering those payroll taxes that are employer payroll taxes. So that would include things like employer portion of Social Security, employer portion of Medicare, and the federal and federal unemployment tax, which is all employer portion. So that would be the journal entry that we would then record for the payroll taxes. If not include, then we usually do this separately, in other words, from the payroll expense journal entry. So the payroll taxes, and we're just going to record our portion. So we usually have to record the payroll expense journal entry, which is usually the longest, most complicated one, payroll taxes, a little bit easier to record typically. It'll include the payroll tax expense, which will be the debit. And then we're going to credit the liabilities that we owe, because typically when we record the journal entry, we do it at the same point in time that we process payroll and have not yet paid it. So cash isn't affected. We didn't write the check yet. We're going to write the check later. Therefore it's going to go into liabilities, liabilities including FICA for Social Security. So Social Security liability will go up for the employee portion of Social Security. So look familiar, it'll look kind of confusing, because we will have a credit to the liability account for Social Security when we record the employee journal entry, the employee payroll tax expense as well. But the employer portion also will be a liability for kind of like the matching of Social Security for the employer portion. Then we'll have the FICA Medicare liability that we will credit to the liability accounts. Then mirroring, matching, looking very similar to what we have done for the employee payroll expense journal entry, but this time being for the employer portion. Then we're going to have the federal unemployment tax that we're going to have to pay. That's an employer only tax, so this one will not look similar to the employee journal entry, because they don't pay federal unemployment tax, so FUTA. We're going to credit FUTA, typically a much smaller amount that will have to be crediting there. And then if we summed up those credits, which would be employer portion of Social Security, employer portion of Medicare and all employer, always FUTA, we can then debit, that will be the debit, and that'll be our debit to payroll tax expense, and that'll be our journal entry debit to payroll tax expense, credit to payroll tax liabilities including Social Security, Medicare and FUTA. Then if we record this thing, what will happen then? Payroll tax expense will go up, expenses increasing, decreasing net income calculated as revenue minus expenses, liabilities will then increase, the liability for Social Security and Medicare will increase and it should be basically twice, meaning what we post, meaning at this point in time, we would have already recorded Social Security and Medicare liability for the employee portion, now we have the employer portion, so the total that we owe will be including now the employee and employer portion typically. And then we'll post the liability for FUTA to the liability account as well, it's only that portion, so it'll increase by the amount that we post, and then we'll have all of our liabilities reflected which we will then have to pay in some future date by debiting the liabilities and crediting cash. The end.