Creating Payroll Checks

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Payroll checks are different than most types of checks you would create, as there are deductions that you need to account for for things like taxes and Social Security. If you aren't using Paychex to generate payroll checks for you, then this article will walk you through creating a typical payroll check:

The first step in creating a payroll check is making sure that you have your accounts for payroll deductions, as well as an account for your salary. For the payroll deductions, such as taxes, Social Security and Medicare, you'll want to create liability accounts. You'll want to start these at a zero dollar balance. For the salary account, you'll want to make these expenses, again, also starting with a 0 dollar balance. For examples on how to create these types of accounts, see the articles below:

Adding a Liability Account

Adding an Expense Account

The next step in creating your payroll check is to add the check. Click New Transaction, select Check and set who your payee is, and the date of the check, a memo, if needed, and your check number. Then, on the left side of the transaction, select the checking account Asset you'll be writing the check from (or Restricted fund, if the money is coming from a restricted fund) and for the amount, enter in the net pay the person is going to be paid (Example: If before taxes a person would be paid 1000 dollars, but after taxes, that person receives 800 dollars, then 800 dollars is that person's net pay, and 1000 dollars is that person's gross pay).

Next, on the right side of the transaction, select the salary expense account you created, and fill in the person's gross pay. The difference between the gross pay and the net pay will make up the deductions that you need to enter back on the left side of the transaction. On the left side of the transaction, under the net pay, select each liability account you created for deductions that applies to this payroll check, and enter the amount of each deduction. Once you've entered each deduction, your transaction should be in balance, and you will be able to save your check. The liabilities will then carry the balance of what you entered in to those, for you to pay later to the appropriate agencies.

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