what chart account should Payroll Garnishments go under
Hi Fatima, great question!
Payroll garnishments are not an employer expense but a deduction that the employer makes on behalf of the organization that has mandated the garnishment (i.e. Child support). With that said, you when you deduct the garnished amount from the employee’s paycheck, it should be coded to a liability account called Garnishments.When you remit the payment to the organization who should receive it, you will clear the liability account when you process the payment.
All the Best-
Crystalynn Shelton, CPA
315 Madison Avenue, 24th Floor
New York, NY 10017
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