Regular tasks for your business should be easy, so we’ve automated most payroll bookkeeping. Here's how it works.
When you approve a payroll in Wave, Wave will automatically create a corresponding journal transaction on the Transactions page. The journal transaction reflects the gross amount of that payroll and contains several lines, for net employee pay, payroll taxes, and any employee bonuses or tax reimbursements.
This journal entry creates a liability, indicating what you owe to your employees and to the government.
What do I have to do now?
If you use direct deposit, you're all set! When the funds are transferred to your employees, Wave will automatically create a settlement transaction, which “zeroes out” the employee liability that was created when you approved the payroll. The remainder of that liability will be settled when you remit the payroll tax to your government.
If you don't use direct deposit, and pay your employees by cheque, you'll need to categorize those expense transactions to Payroll Liabilities when you see the transaction imported from your bank.
If you don't have your bank account connected, you can manually create an expense transaction for the amount of your employees' net pay and categorize it the same way.
If you delete an approved payroll, a matching journal transaction will be created with the credits and debits reversed, to cancel out the original transaction. The journal transaction will also be tagged as “deleted” for ease of reference.
Manual benefits or deductions
If you manually add a benefit or deduction to an approved payroll, it will appear in the created journal transaction as an uncategorized expense. When the journal transaction is created, head on over to the transactions page, and categorize the line item to the most appropriate expense category.