Is wage garnishment a liability?
Is wage garnishment a liability?
When the employer holds the wage or salary of the employee for garnishment purpose, he or she reports it properly in the accounts of the company. The employer usually discloses this amount as a current liability in the balance sheet.
How do you account for garnishments in accounting?
Write “Wage Garnishment Payable” and the account balance as a current liability on your balance sheet of your financial statements to properly record the account. In the example, you have a current liability of $5,000 in the Wage Garnishment Payable account.
How do I pay a wage garnishment in QuickBooks online?
Add a garnishment — QuickBooks Online Payroll
- Go to Payroll menu, then Employees.
- Choose employee’s name.
- Select edit ✎ beside Pay.
- Choose edit ✎ to add a deduction.
- On the drop-down, select Garnishment and Garnishment Type.
- Enter the description, amount requested and the maximum percent of disposable income.
- Select OK.
How do you account for payroll deductions?
The journal entry will record the wages expense and any deductions from the employee paychecks.
- Debit “Wages Expense” for the full amount the company must pay for the pay period.
- Credit “Net Payroll Payable” and any deductions required.
- Add the total number of debits and then add the total number of credits.
Can QuickBooks Payroll do garnishments?
Add a garnishment — Intuit Online Payroll/Accountant. To add a garnishment that is deducted from an employee’s disposable income, follow these steps: Go to Employees, then choose the Employee’s name. Select a garnishment type, then enter the required information.
What is the journal entry for payroll taxes?
Debit the wages, salaries, and company payroll taxes you paid. This will increase your expenses for the period. When you record payroll, you generally debit Gross Wage Expense and credit all of the liability accounts.