323 Payroll Taxes Payable

Liabilities

Accrued

Synopsis

Account 323 is established to record the amount of Payroll Taxes payable or accrued.

Debits

Credits

Payments made

Employees’ taxes withheld
Employer’s taxes on payrolls

Example 1

Record the payment of the salary, wages & commission payroll in the amount of $199,000 of which $56,170 is payroll taxes and $14,400 is retirement benefits.

Journal: Payroll

Entry:		Debit	Credit
Account 321	Salaries, Wages & Commissions Payable	$180,000
Account 025-01	Taxes – Payroll – New Vehicles Department	$5,090
Account 025-02	Taxes – Payroll – Used Vehicles Department	$3,095
Account 025-04	Taxes – Payroll – Finance & Insurance Department	$1,830
Account 025-05	Taxes – Payroll – Mechanical Department	$3,450
Account 025-06	Taxes – Payroll – Body Shop Department	$385
Account 025-07	Taxes – Payroll – Parts & Accessories Department	$1,550
Account 029-01	Retirement Benefits – New Vehicles Department	$1,200
Account 029-02	Retirement Benefits – Used Vehicles Department	$600
Account 029-04	Retirement Benefits – Finance & Insurance Department	$400
Account 029-05	Retirement Benefits – Mechanical Department	$900
Account 029-06	Retirement Benefits – Body Shop Department	$100
Account 029-07	Retirement Benefits – Parts & Accessories Department	$400
Account 202	Cash in Bank		$128,430
Account 323	Payroll Taxes Payable		$56,170
Account 330	Retirement Benefits Payable		$14,400

Example 2

Record the payment of the payroll taxes in the amount of $56,170.

Journal: Cash Disbursements

Entry:		Debit	Credit
Account 323	Payroll Taxes Payable	$56,170
Account 202	Cash in Bank		$56,170

Comments

A credit balance represents unpaid payroll taxes.