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BeckyAlthaus
November 23, 2022
Question

3rd party payroll service and setting up accounts for GL for benefit company contributions

  • November 23, 2022
  • 1 reply
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We just started offering health insurance and the GL has a debit for the company contribution and a credit for the benefit liability from the employee. 

How do I treat the company contribution from the GL. What is the appropriate account? Do I make that an expense or do I code that as well to the benefit liability account? And when making a payment to the provider does that get coded to the liability account or an expense account? 

1 reply

Rainflurry
Rainflurry
November 23, 2022

@BeckyAlthaus 

 

Company contributions are both an expense (debit) and a liability (credit) as of the pay date.  That books the expense and makes a corresponding entry into a liability account until you pay the premium.  When you pay the premium, assign the liability account to the payment.  That reduces your cash and clears the liability. 

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