QuickBooks and PD7A
Bookkeeper Yearend Wage Accruals and T4 Slips
It is year end and pp26 ran Dec. 4-17/2011 and was paid Dec. 22/2011.
As the tax return is on a cash basis this makes me understand that the last pay period in December which ran the 18-31 will not be paid till Jan 5/2012. These 2011 wages will become pp1 in 2012 and will carry into January 2012 when they are paid.
I'm thinking I don't want the Dec. 18-31 wages to show up on the 2011 T4 slip or summary but QuickBooks does not allow me to modify the T4Summary to Dec 17 which was the last pp in 2011.
Am I mistaken in how this works? I expected to close off the T4 Summary on Dec 17/2011. I expected Dec 18-31 paid in 2012 to be the first pp of 2012.
I think you'll find that when you do your first pay period (pp) in 2012 that pays out the income earned in 2011, the PD7A will automatically exclude the unpaid wages from the 2011 report and automatically include the amount in your PD7A report for 2012.
QuickBooks "knows" that income is reported in the year it was paid for tax purposes and will also adjust your T4 slips and T4 summary to accommodate this rule.
However, for accounting purposes, you need to accrue (in a journal entry) the wages that were earned but not paid in 2011. Reverse the accrual in the following month. This ensures that your wages and payroll taxes are not understated in 2011 and overstated in 2012.
Hope this helps you out.P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.