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Accounting, Payroll & Pension Issues/Deferred Salary accounting
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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.
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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| Comment | Thank you so much for your prompt response to my question. It really helps to have professionals like you sharing your valuable knowledge as we are a small business and I wear many hats and am not all knowing. | ||
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Accounting, Payroll & Pension Issues
Answers by Expert:
Mike Wellman
Expertise
I can answer questions dealing with financial accounting, tax accounting, bookkeeping and payroll issues. NO PENSION questions.
Experience
Certified in 1980. Experience with Fortune 15 company in finacial accounting, manager at Price Waterhouse and then over 20 years with small business clients.
Education/Credentials
BBA - Baylor University.
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