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You are here: Experts > People/Relationships > Retirement Planning > Accounting, Payroll & Pension Issues > Deferred Salary accounting
Expert: Mike Wellman
Date: 8/5/2008
Subject: Deferred Salary accounting
Question
We have a new staff member who wishes to defer salary payment for three months. I did not ask why. My question: Are payroll taxes created when the actual wages are paid? Are there any payroll taxes that need to be paid before then? This will all happen within the calendar year, but please address if this happened into the new year. Thank you for your time in answering.
Answer
As far as payroll accounting and the IRS is concerned, the payroll taxes are not due until the salary is actually paid. For financial accounting purposes, you accrue the salary of course. You should accrue the employer portion of the taxes but only if they are material.
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