Manually Post a Federal Payroll Tax Payment

This article addresses how to manually post a federal payroll tax payment into your books.

This article will specifically address posting a Form 941 type of payroll tax payment; thus these are Federal (income) Withholding, Social Security & Medicare taxes. These are not the federal Form 940 Unemployment taxes.

So here is one scenario:

You processed an employee taxed paycheck. The gross wages earned for this pay period were $2750. However, there was a Federal Withholding (income) tax deduction (from the employee’s wages) and also deductions for both Social Security and Medicare. So here is the breakdown:

• Gross Wages: $2750
• Federal Withholding: $32
• Social Security: $170.50
• Medicare: $39.88
• Net Pay: $2507.62

So, you wrote your employee a paycheck payment for $2507.62.

Now you still need to submit to the IRS a payroll tax payment. This tax payment will cover BOTH the employee’s deductions (as stated above) and the corresponding Social Security and Medicare matches paid by the employer. In this case, the employer matches are:

• Social Security: 170.50 (the same amount as above)
• Medicare: $39.88 (the same amount as above)

So, on or before the due date, you will submit one payroll tax payment to the IRS that will cover the total 941 Federal Form type obligations resulting from the one paycheck. Typically, in the very small business world, this will be just a two line-item entry in your books, and it is as follows:

Line number 1: $242.58 – the expense account is “Gross Wages”. This will cover the employee’s share of these payroll tax obligations.

Line number 2: $210.30 – the expense account is “Employer Taxes”. This will cover the employer’s share of these payroll tax obligations.

Note: AccuraBooks is a bookkeeping firm only, so please consult with your C.P.A. for verification and clarification about the contents of this article.