Entering Payroll Deductions - Rest of the World

Last Updated: Jan 18, 2016 02:38AM PST

Learn how to enter your payroll deductions into Kashoo if you live outside of the USA or Canada. We'll walk you through an example of entering an employee paycheck and then remitting the taxes to the government. Depending on your country, they way you pay your employee and remit payroll taxes will most likely vary, so please use this example as a rough guide.

Note: If you operate a business in Canada or the USA, please see our articles specifically made for those countries: Entering Payroll Deductions - USA and Entering Payroll Deductions - Canada.

Create your Payroll Accounts

The first thing you will need to do is make sure that you have payroll accounts set up. When you pay an employee, you deduct payroll taxes that you’ll then remit to the government. Check with your local tax authority to find out what kind of taxes you need to withhold and pay for employees.

In this example we'll assume that the employee needs to pay income tax and that insurance will be jointly paid by the employee and employer. Here are the Taxes and Remittances liability accounts that would need to be set up:

  • Income Tax Payable
  • Employee Insurance Payable
  • Employer Insurance Payable

To create those accounts go to Accounts under the Setup section in the left hand navigation menu.

In the Add New Account section, add the Taxes and Remittances accounts that you need, like so.

If you look at the Liabilities / Credit Cards section, you will see the new accounts that have been created.

Note: Kashoo by default already has a “Payroll Expense” account, so you should only need to add Taxes and Remittances liability accounts. If you imported your own chart of accounts, then be sure that you do have an equivalent Payroll Expense account as these instructions assume you do.

Creating an Employee Paycheck

You can create an employee paycheck by going to the Payroll page.

For this example, the employee made $1,000 (gross pay) for the pay period. Here is the pay stub:

Item Amount
Gross Pay $1,000.00
Income Tax -$100.00
Employee Insurance Portion -$25.00
Net Pay $875.00

So after taxes, the Gross Pay of $1,000.00 becomes Net Pay of $875.00.

Given a paycheck like the one above, this is how it would be entered in the Payroll page.

Note: To get the Tax and Remittances accounts to show up in the Expense Account field, you will have to scroll down to the bottom and click Show All Accounts. Alternatively, you can simply start typing in the account name into the text box and it will display accounts that match the name.

Note 2: Take special notice that the Expense accounts are positive and the Payable accounts are negative.

You may have noticed that the above entry is slightly different than the pay stub. This is because the employer is responsible for matching the employee's insurance contribution. This is represented by the following two entries:

  1. Employer Insurance Payable: $-25.00
  2. Payroll Expense: $25.00

In the end, the Payroll Expense is $1,025. $875 will go to the employee, while $150 in income and insurance taxes will go to the government and be entered into the books as liabilities.

After you Save the paycheck it'll show up in your Expenses. You can go directly to it by clicking on the Edit link.

Something that will be missing from the new expense you created is the Vendor name. So make sure to enter the name of your employee in the field and then click on Save.

Paying electronically (like via a bank transfer)

If you'll be paying the paycheck electronically (like via a bank transfer), then you record this in Kashoo by going to the Expenses page and then the Pay Bill tab.

You then choose your Date, Vendor (Employee) name, Payment Account, enter the Amount to pay, and click on Record Payment.

Paying by paper check

If you'll be paying with a paper check, you can use the Check Printing page.

In the page, choose the Date you want to print the check on, choose the From Account to select the payment account, enter the Starting Check #, and then click on the checkboxes to select the employee paycheck to pay.

Then click on Print Check(s), confirm the details, and proceed to print the check(s).

If you need additional information about printing checks, please view this article.

Remitting payroll taxes to the government

Once you've paid your employees for a remittance period, you can check how much you owe the government by going to the Balance Sheet report in the Reports section of the left hand navigation menu.

Go to the Payroll page to remit payroll taxes to the government.

Based on the balance sheet report we generated, we owe payroll taxes of:

Expense Account Amount
Income Tax Payable $100.00
Employee Insurance Payable $25.00
Employer Insurance Payable $25.00
Total $150.00

This is what the payroll remittance entry would look like:

Once you save this entry, make sure to click on the Edit link to add a Vendor name. After that, you can pay the bill by going to the Check Printing page or by going to the Expenses page and using the Pay Bill tab, just like you did when paying the employee paycheck.

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