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Payroll Deduction Accounting

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Explain the responsibilities of and the accounting by employers for employee payroll deductions.

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Solution Summary

The solution details the accounting related to common employee payroll deductions.

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The responsibilities of an employer regarding employee payroll deductions are to make said deductions and hold until the necessary payment to the taxing authority and/or insurance companies is mandated. By law all employees who are not contract labor must have regular payroll deductions withheld by their employer. The IRS and other taxing agencies have tests that determine whether an employee is contract. Essentially if an employee is given a task and has full authority ...

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