How to simply record PayChex payroll using the PayChex Cash Requirements Report

Modified on: 2017-04-20 12:21:38 -0400

If Paychex is your payroll service provider, the best and simplest way to record payroll is to create one journal entry. This journal entry will affect  a few accounts that should be created in Design Manager if they do not already exist.

What you will need:

  1. The Cash Requirements Report that comes with the payroll checks upon delivery.
  2. The following four accounts to be set up within Design Manager if they are not already:
    • Cash Account (Asset) ? This is probably already setup and is the account that
    • PayChex takes the money out of when they run your payroll.
    • Salaries (Expense Account) ? This holds the total amount you paid all employees for their salary. You do not need to break it down further nor have one account for each employee. That information can be obtained from PayChex reports (although splitting the salary account maybe useful, e.g. ?Officer Salaries? and ?General Employee Salaries?).
    • Payroll Taxes (Expense Account) ? This holds all of the taxes that you paid (FICA, Unemployment, etc.) You could break it down into each type of tax but you really do not have to because you can always refer to your PayChex reports.
    • Note: This has nothing to do with the employee deductions; it is only the ?Employer Liability.?  There is no need to record the employee tax deductions because PayChex handles that for you.
    • 401K Match (Expense Account) ? This account is optional and only applies if your company offers a 401K program and matches contributions.
  3. To record one journal entry - see Example below.


If there are three employees in a pay period:

  • employee 1 makes $4000
  • employee 2 makes $3,000
  • employee 3 makes $3,000
  • Their total salaries are $10,000.

The top of the PayChex Cash Requirements report states how much is required. In this example it states $12,000 which consists of:

  • $10,000 in salaries
  • $1,500 in Employer Liabilities (Social Security, Medicare)
  • $500 in 401K matching

The Journal Entry would be:



Payroll Taxes

401K Match

Why one journal entry?

  1. One entry makes it more difficult for other employees to determine salaries of co-workers.
  2. PayChex already maintains the detailed entries about taxes and employees.
  3. Details are easily accessed online via PayChex and in your PayChex Reports.
  4. A wide range of administrative and payroll reporting tools are available through Paychex.
  5. The small numbers of Payroll entries are very easy to track within Design Manager.

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