Using General Journal Entries for Payroll in Quickbooks?

Our small business (4 employees) just bought QuickBooks '07 Accountant Version & we are not planning on purchasing the payroll edition because we like our current payroll system the way it is. We want to enter our payroll amounts in a General Journal Entry of QB and bypass the "Employee Center." Should gross pay be in debit or credit column? What about Federal, State and City? I am not going to ask for FICA because that one is a bit complicated at this time and I will figure that out later. I appreciate a response. Thank you.

If you are not going to use QuickBooks to calculate payroll and pay payroll taxes then all you really need it to keep up with the wages you pay out - correct?

Basically, when you enter withholding taxes into a program such as QuickBooks, they are entered and when paid your liability goes back to zero.

So, you could get by with just entering the gross wages into an expense account that you set up for wages.

To make an entry you would credit 'Wages' and debit the bank account you wrote the check out of.

At the end of the year, your wages should match what is on your W-3 for the year, and you need to enter State and Federal Unemployment in the 'Payroll Tax' expense account, and any unpaid withholding taxes that are due you need to enter them in 'Payroll Tax Liability'.

I would not use journal entries for this. I would set each employee up as a vendor and use the accounts payable function to pay them. Journal entries should only be used to make corrections.

By using the A/P function you can have General Ledger accounts set up for withholding categories.

If all you want to show is the net amount paid to someone and keep up with the taxes elsewhere, enter it into payables and enter the check number. Then you can trace all payments from one program.