Posting Employee Contributions for Health Insurance
A client called asking for help in posting payroll deductions for employee contributions for health insurance. The insurance bill has to be paid in advance, and she's posting it to the Employee Benefits; Health Insurance expense account. Then, when she wants to remit payroll liabilities she can't write a check to clear the deductions, because the check has already been written. The liabilities total just keeps growing
The easiest way to fix this is to change the payroll item for the payroll deduction so it's not posting to a liability account at all. Instead, link the payroll item to the same expense account used for the check to the insurance company. The Profit & Loss report will display the net expense for that account (the vendor payment less the credits for the employee contributions). The Vendor report shows the bills paid in full. If you need more detail in the general ledger, make the insurance expense a parent account and create two subaccounts: Payments and EmployeeShare. Post the insurance payment to the Payments subaccount, and link the payroll item to the EmployeeShare subaccount. Your account detail reports will show the appropriate amounts and on your P & L the parent account will total the postings to the subaccounts and display the net.