Much appreciate for this forum, I have a question relating to Employee withhold tax Deductible at the YE Mar 31 2023.
My YE closing is on Mar 31 2023, I need to record the payroll expense and employee withhold tax expense on the Financial Statement. So I am not sure how can I record it?
Should I report the payroll expense is only from Apr 1,2022- Dec 31, 2022 and another the payroll expense from Jan - Mar 31 2023 will be included or will be at account payable?
Would the payroll expense affect employee- withhold-tax payable to CRA? how can I report this amount on the Balance Sheet ? I am aware that this is accounting and bookkeeping transaction, not relating to tax . Much appreciate once you instruct me how to record this transaction in the bookkeeping ? thank you for your time
My first answer was “Hire a pro to do the work”…which is still my recommendation. Trying to do your own bookkeeping with a lack of comprehension of basic requirements is not smart.
My second answer is:
You accrue the amounts due as at March 31 - be they payroll, employer premiums, whatever. The amounts are expenses on the income statement and either a charge to the bank (if paid by March 31) or a payable (if unpaid at March 31).
This is rather basic bookkeeping and if you’re doing it yourself to save a few bucks, you will likely be costing yourself more in the long run. Just a friendly suggestion from a person who does this for a living.
I don’t know how you record payroll in your accounting records but at the end of the year, your payroll expense should be the total of the net pays to your employees plus your source deduction remittances for the year (the year being April 1 22 to March 31 23). You will have to add the April '23 source ded’n payable and subtract any similar payable at March 31, 2022. Obviously, this is a simple example and doesn’t account for any complications you may have such as garnishees or accrued wages/bonuses.