Understanding Expenditures in Payroll

July 18, 2019 by OSYB Staff

If you read our previous post, ‘Need Help Calculating Your Payroll?’, here are some other important factors to understand when calculating payoll that Intuit Quickbooks shares:

• Remuneration is how your employees are compensated for their labor. Your employees and your business will be taxed on remuneration. Therefore it is vital that detailed attention is placed on determining the exact withholding taxes from employee checks.
• If you offer benefits such as healthcare, life insurance, retirement contributions, healthcare savings accounts, and even paid vacation and sick time, etc., whether or not you contribute, it is your responsibility to keeps track of these deductions, calculate them correctly and maintain accurate records.
• Then there is social security, Medicare, and federal unemployment taxes and this category encompasses federal, state, and local taxes (if applicable) that both an employer and their employees are required to pay. All employees and employers are responsible for making Social Security and Medicare contributions. Employers are solely responsible for paying federal unemployment tax payments. As an employer you are responsible to be up-to-date with all federal and state tax requirements and regulations and make the appropriate payments.
• Income tax deductions also fall under your responsibility. As an employer, your responsibility is to correctly calculate the amount of gross wages that are eligible for federal and state taxes, as well as the subsequent tax amount. Once you’ve deducted that amount, it’s your responsibility to pass that money along to the appropriate government agency.

So now that you have a better understanding of what it takes to calculate payroll, you have three options:

• do it yourself
• hire an accountant or payroll specialist
• automate your payroll with a full service software

Whatever your choice, make sure it is done accurately for both yourself and your employees.

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For more detailed information: DIY accounting: how to calculate payroll

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