Payroll Liabilities (Accounting) - Explained
How to Account for Employee Payroll Liabilities
Written by J. Mance Gordon
Updated at April 18th, 2024
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Accounting for Employee Payroll Liabilities?
These are obligations that the employer must pay on behalf of (take from employee's paycheck) or as a result of having employees (employer's obligation):
- Federal, State, and (sometimes) City Income Taxes - Withheld on behalf of the employee.
- Federal Income Contributions Act (FICA) Taxes - Covers Medicare and Social Security. Approximately 1/2 is withheld from employee paycheck and 1/2 is paid by the employer.
- Voluntary Withholdings - Retirement, Contributions, etc.
Payroll liabilities are know liabilities - you know how much and when you will have to pay.
Related Topics
- What are Current Liabilities? – Financial Accounting
- How to Record Accounts Payable (Liability Accounts)? – Financial Accounting
- What are Notes Payable? – Financial Accounting
- What are Employee Payroll Liabilities? – Financial Accounting
- Estimated Liabilities (Warranties) – Financial Accounting
- What are Contingent Liabilities? – Financial Accounting