One component of the payroll taxes you deposit with the government is FICA tax (made up of Social Security and Medicare taxes) One-half of the FICA you pay is withheld from employees; the other half is your share (an expense of the business). If you have payroll taxes due at the end of an accounting period that will be paid next period, you should accrue the employer share of FICA that is due at period end. This is done with an adjusting entry in your general journal.
|Payroll taxes expense||210.25|
|Payroll taxes payable||210.25|
|To accrue employer share of FICA owed but unpaid on 12/31/2002|