Employees & Tracking payroll taxes
Hello brilliant minds, for those that have employees, how do you track payroll taxes. As an example payroll for Employee 1 is Gross $500. Income tax $25, CPP $15, EI $10 so gross payroll from the bank account is $450 ($500 - $25 - $15 - $10).
In addition their is the employer portion of the CPP and EI (CPP $15 and EI $15) for a total of $40 employer taxes.
Remittance owing is now:
$25 Income tax
$30 CPP ($15 employer plus $15 employee)
$25 EI ($15 employer plus $10 employee)
For total remittance of $80 owing
How do you track this all?
I'd suggest a more capable accounting system that's built to track this sort of thing in a more automated fashion.
If you're using YNAB, you'd probably manually budget to an income tax, CPP, EI, etc. categories with every payroll event. The problem is there's not a lot of error-checking. When you pay those "expenses", you record the outflow against the appropriate category. It's going to be a very manual and error-prone process with YNAB. Not impossible, but it's just not a great tool for the job.
I agree with the other posters. I don't think that YNAB can handle that type of detail. I was trying to see if it could be done but it would be very convoluted. My thought was to set up CRA as a credit card. Budget cost on each payroll to the appropriate category. Pay the employee the net from the appropriate account. "pay" the CRA amounts on the credit card account. It would then accumulate into the CRA credit card account until you physically pay the bill. But, still, very convoluted, and need to track lots manually.