How To Record Payroll Deductions As Split Transactions?

Okay... OKAY! I KNOW what you're going to say... It is recommended that net pay (after deductions) is recorded in the account register. I recommend it too! But... the wife insists (rather emphatically) on recording both gross pay and deductions, then linking them to the paycheck. 

The problem is that it doesn't seem to work via split transactions. I can't seem to successfully enter the net pay as an inflow. I get an error message each time I try to "Save" under the following conditions:

  1. Followed the precise steps as outlined in Whiteboard Wednesday's "Handling Paychecks In YNAB".
  2. Entered the Gross Pay as the parent inflow, then the deductions as outflows.

Now, at one point (and 'only' one point) our recommendation was correct and accepted... until she viewed the same Whiteboard Wednesday video I did (behind my back though) where Jesse SAID that it could be done... here's how. Of course, I did myself no favors either by showing her that I can successfully perform these same splits via my Android app (aka bragging rights).

I have always been able to successfully perform splits via my Android smartphone, but the wife is all Apple. I tried blaming Apple (she can't do it using her iPhone, iPad or Mac 馃槕) but it seems that I can only find such success using my Android, but not my PC running Windows 10. 

It may also help to understand our migration paths from YNAB Classic.

  • I've been using YNAB for over 5 years. I migrated to the new YNAB from its inception. My migration path occurred via the Android App within the Google Play Store. 
  • She's been using YNAB for over 3 years. She recently (1/1/18) migrated to YNAB from the Apple App Store (classic) to the YNAB webapp (new YNAB). 

Thank You.

STAY BLESSED! 

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  • Paycheck deductions are not split transactions; they are normal transactions that should be managed at an Account level through a virtual Account named (eg.) "Paycheck Deductions". Manage this Account by using a YNAB scheduled Income Inflow transaction (Gross pay minus Net pay amount) that aligns with your income pay date and then create as many YNAB scheduled Outflow transactions (categorised paycheck deductions) as necessary on this pay date in order to reduce this scheduled income amount to zero.

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    • elsewhere Are you still using this strategy. Can you elaborate on this more, and also are you able to look at reports/trends to find out how much % is going into taxes/deduction ?

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  • I do my paycheck as a split.  Net amount in the top line, with deductions as negatives to each category that's deducted and the gross as income.  The difference is always the net pay. It's a normal split.

    If I did separate transactions, it wouldn't match my bank statements. 

    I find that actually recording my deductions helps me make better choices... seeing all that money go to taxes makes me realize how important it is to maximize my tax-advantaged accounts. 

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      • Brad Hull
      • Since YNAB Pro
      • sinceYNABPRO
      • 2 yrs ago
      • 1
      • Reported - view

      Scrimp  I have been doing the same thing for more than five years. I t is very important to me to know what my Gross Income is since that is what I am taxed on.

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    • Scrimp How do you make this work? Do you go to your bank checking account transaction, edit and make splits ?

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    • eloquentz
    • Numbers Wizard (Accountant), Acoustic Artist (Musician) and Jill of all Trades (Wife & Mother)
    • eloquentz
    • 2 yrs ago
    • Reported - view

    I can't even imagine doing this.  The breakdown of tax expenses and other deductions is what my tax return is for the next spring.

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  • Hi Huh B !

    You're right, we Strongly suggest dealing with Net amounts in your budget but, as you found in that Whiteboard Wednesday, gross amounts can be used, too. :)

    Based on your post, I'm not sure if you're having trouble calculating the split or if you have it calculated, but can't enter it from non-Android devices.

    One thing I did notice is that you said you're using the Gross Pay as the parent inflow - the Net Pay should be the parent transaction. The Net Pay should be used as the transactions amount, and then the splits should break down how you got to the net (gross-taxes).

    So, let's say your gross is $700 but your net is $500. You'd enter the transaction for $500, then, in the splits, you'd enter $700 in inflow and $200 in outflow (for the $500 total).

    You should be able to enter it that way on Android or iOS.

    I hope that helps clear things up! :)

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  • Hello all.  So I am back after years and years away.  I am so glad it looks like many of the kinks have been ironed out :-)

     

    Now one last kink.  It has been a while.  I used to be great at this, but need a refresher.

    Itemizing Pay: I did as you all advised.  Thanks.  Put the net in the top line as an inflow.  put deductions as outflows.  Now comes the tricky part, if I put the gross as an inflow, it balances...yes!  but.  now it is asking for a transaction.  I messed up by selecting it as an inflow category in the drop down, and it wiped all of my itemizations away...yikes!  So then, what should I categorize the gross as?  Otherwise it seems to just float to the top of my budget, and not have a home.  thanks

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 2 yrs ago
      • 1
      • Reported - view

      Gray Tiger In the split, the Gross should be categorized to Inflow: TBB, and the "spending" outflows should be properly catrgorized. Then you have to budget money against the categories from the outflow in the split after the transaction has been saved. You should have some overspent categories for things like taxes or health insurance, because you created the transaction but never budgeted for it.
       

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      • Brad Hull
      • Since YNAB Pro
      • sinceYNABPRO
      • 2 yrs ago
      • Reported - view

      nolesrule 

      We have been entering all of our income as gross income (To be Budgeted) as split transactions with the amounts withheld as expenses since January 2013 using both YNAB4 and the newer web YNAB successfully.

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  • Thanks for replying.  Got it now.  Thanks

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