Should I accrue wages and how would it affect the payroll remittance?

Hello @Kathy54 ,

A wages payable accrual in your case should be quite simple.  Basically you would wait until you ran your payroll on the 7th of the month (April 7, for example).  You know that the entire payroll entry is for the previous month (March).  So you would take all the applicable expense entries from the Apr 7 payroll, i.e. Wages, Vac Exp, Company CPP & EI Expense, and any other pertinent expense to the company, and make a journal entry posting those amounts, dated Mar 31.  This captures all your actual payroll expenses for the month of March.

On Apr 1, that JE should be reversed.  So now you have the actual payroll entries dated Apr 7 and the reversal of the March wage accrual dated Apr 1.  It is a wash.  There will be no payroll expenses recorded until the following month, which you will take from the May 7 payroll and create the Apr 30 wage accrual.  It usually takes at least a couple of weeks to finalize a previous month's records anyways, so that is why I suggest waiting until you run the actual payroll to do your entry for the previous month.  This way it will be exact; no estimating those difficult CPP and EI amounts, etc.

It should be noted that because you are posting directly to the CPP and EI expense account in the wages payable JE, that your actual payroll liabliity for the period will not be affected.  QBO payroll remittances only pick up the amounts that are generated through the payroll module.  So your liability amounts to CRA will be intact from the actual payroll you ran on Apr 7 and that payment will not be due until May 15 (if you are a monthly remitter).

The net affect of all these entries are as follows:

Hope this helps somewhat.  Good luck!