Finance and Bookkeeping - Session 19

Taxes Payroll and the Obligations Calendar

Check payroll calculations, explain what the company still owes, and build a tax and payroll checklist with clear deadlines and payment confirmations.

The MSP finance task

Your payroll provider says payroll is processed. You need to check what employees received, what tax payments are still due, and whether scheduled payments actually went through. The admin manager checks the records; the CEO reviews unresolved problems.

Filing a return and paying tax

A tax return reports information to a tax authority. Filing submits the form. Paying transfers money. Give each task its own status.

Employee pay and employer costs

Gross wages are pay before deductions. Withholding reduces the employee’s net pay. Employer payroll taxes add to the company’s cost.

Confirm the company’s tax tasks

Ask the accountant and payroll provider which taxes apply, when filings and payments are due, and who performs each task. Keep the source for each deadline.

The dated tax and payroll checklist

Record one action per row: task, period, due date, person responsible and status. Save the record that confirms completion. An accepted return can have an unpaid related tax payment.

Check that the payment completed

Compare the payment confirmation with bank records and the amount owed in accounting. Check the amount, recipient and period. A rejected payment leaves the tax unpaid.

Records can arrive after money moves

Payroll synchronization transfers records into accounting after the fifth and fifteenth. Confirm actual bank withdrawal dates separately when planning cash needs.

Practice: where the payroll money goes

$10,000 gross wages minus $2,000 withholding gives $8,000 net pay. Add $800 employer tax: total expense is $10,800, with $2,800 in taxes still owed after employees are paid.

Follow up on payment problems

The admin manager checks records and follows up with the provider. The CEO reviews unresolved problems and approves corrections. Confirm any planned retry before arranging another payment.

A pay period has $10,000 gross wages, $2,000 employee tax withholding and $800 employer payroll tax. There are no other deductions. How much do employees receive?

  1. $10,000
  2. $8,000
  3. $7,200
  4. $10,800

Employees have received their net pay. This pay period has $2,000 employee tax withholding and $800 employer payroll tax, both unpaid. There are no earlier tax balances. How much tax does the company still owe?

  1. $800
  2. $2,000
  3. $2,800
  4. $10,800

The bank rejects a $2,800 payroll-tax payment. No retry has completed, but the tax return was accepted. How much of this tax payment is still owed?

  1. $2,800
  2. $0
  3. $800
  4. $2,000

Key terms

Gross wages
Employee pay before taxes and other deductions are taken out.
Withholding
Money deducted from employee pay for taxes or other authorized purposes.
Net pay
The amount an employee receives after deductions from gross wages.
Payroll register
A provider report showing wages, deductions and employer costs for a pay period.

Three points to remember

  1. Employee withholding is already included in gross wages.
  2. Give filings and payments separate checklist rows and confirmations.
  3. Confirm deadlines, bank withdrawal dates and who follows up on failures.