
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.
-
I use a payroll company so the transactions are pulled directly from the bank and I use multiple categories for transactions that break down the expenses - wages, various taxes, etc. Really pretty simple. If however, you are trying to figure out payroll taxes, that's a whole 'nother ball of wax that I couldn't begin to be helpful with...
-
I also use a payroll company to run our payroll, and I track the various payroll taxes in Quickbooks. So, I use Quickbooks as my accounting software, but I use YNAB for budgeting and planning. In YNAB, I just have a category called "payroll taxes" and I don't sub-categorize them all out. I do that in Quickbooks, based on the system my accountant set up for me.