Paying payroll liabilities
Objective: Record remittance of payroll liabilities.
Recommended first: Employer payroll costs
Withheld amounts and employer taxes accumulate in Payroll Taxes Payable until remitted. Remitting debits the liability and credits Cash — no new expense.
Payroll liabilities accumulate between payroll runs and remittance dates. A good monthly check is to compare the Payroll Taxes Payable balance with the amounts calculated in the payroll records. A balance that keeps growing may mean remittances were missed; a debit balance may mean an overpayment or a remittance recorded twice.
Remitting does not create new expense: the expense was already recorded when payroll was processed. The remittance entry only settles the liability with cash.
Check your work
- Does the liability balance match payroll records?
- Was the remittance recorded against the liability, not as an expense?
- Are any unusual balances investigated?
Keep remittance confirmations with the payroll records.
Pay $460 of payroll taxes owed.
| Account | Debit | Credit |
|---|---|---|
| Payroll Taxes Payable | $460.00 | |
| Cash | $460.00 |
Common mistakes
✗ Recording remittance as Payroll Tax Expense.
✓ The expense was recorded with payroll.
Guided practice
Use hints freely here.
Item 1 of 1
Remit payroll taxes
On Mar 20, 2026, Corner Bean Café pays $680.00 of payroll taxes it owes (withheld and employer amounts already recorded).
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Independent practice
Try these without hints. Completing the lesson needs at least one independent item solved without revealing the answer.
Item 1 of 2
Record payroll with withholdings
On Mar 15, 2026, Corner Bean Café pays gross wages of $7,900.00. Using this exercise's fictional combined withholding rate of 15%, it withholds $1,185.00 and pays employees the net amount in cash.
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References and provenance
- OpenStax, Principles of Accounting, Volume 1: Financial Accounting (accessed 2026-10-29)
Original lesson written for Bookkeeping Exercises (AI-assisted drafting). Calculations are verified by the platform's automated accounting tests. Not yet reviewed by a credentialed accountant. Updated 2026-10-29.