If you are integrating or recording payroll with your bookkeeping system, you'll want to match our general ledger codes with the cart of accounts in that system. We keep track of your payroll-related transactions using General Ledger codes. If you are not familiar with how to use general ledger codes, or a chart of accounts in your business, we recommend that you read this article or consult your bookkeeper and accountant.
Payroll and Accounting Background
When recording payroll transactions and expenses in your accounting system, you should be aware of liabilities and expenses.
Expenses are typically considered items that you or your business have paid for. For example, if you've sent net wages to your employee, this would be considered an expense (you've already paid it out).
Liabilities are items that are not currently paid, but will be paid at a future date. For example, the payroll source deductions (CPP, EI, Federal and Provincial tax,) are considered liabilities--you are collecting them on behalf of your employees and will be remitting them to the CRA/Revenu Québec at a later date. When the item is eventually paid, it becomes an expense.
Your PaymentEvolution account adheres to these principles and you'll see that payroll transactions have a liability and expense side. You should create these account codes in your accounting system to properly reflect your payroll transactions.
Payroll Standard Chart of Accounts
We adhere to the Canada Revenue Agency's guidance on account codes, the GIFI standard. The following descriptions will help you determine how to match Payroll's chart of accounts and general ledger codes to your bookkeeping system.
You can update any of our codes to match your Chart of Account codes if necessary.
*Note: Please enter your own GL code for liability-Vacation Balance.
For each benefit and deduction you have for your company, you can create a GL code under Pay Rules to accurately report on your General Ledger Report.