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Payroll ledger accounts are expenses and liabilities that are posted to during a Pay Run. To automate the pay run process, default accounts (ledger accounts) set the rules for ledger posting so selecting ledger accounts at pay run is not required. Figure 1 displays a list of default accounts that are based on payroll items added to the company setup. This window is for information only. Any change made to default accounts for payroll items is to be completed at the payroll item directly. This is shown in Figures 2 through 4 below.
Figure 1: Default Accounts Against Company Setup
Payroll items Income, Deductions, and taxes all have to post to the ledger. However it is difficult to have a default account for all income, as it may be necessary to separate salary income from commission income. It is likely a good idea to have separate totals for deductions, RRSP, and medical expenses as an example, as the total withheld for each is remitted to different vendors. Even taxes, although likely going to the same government payroll authority would still be advantageous to have separated for reporting. Because of this, default ledger accounts for payroll items are indicated on the payroll item itself when they are added to the company setup.
Figure 2: Company Income Window, Default Ledger Account
Figure 3: Company Deductions Window, Default Ledger Account
Figure 4: Company Tax Window, Default Ledger Accounts
The only requirement here is the expense of wages. The deduction for RRSP is employee contributed only. The tax CPP has an employee and employer contribution so no liability exists as the wages are paid during pay run. So there is no expense to the company for RRSP's. An expense for the employer portion, liability to store both until remitted.
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