When reporting employee salaries and wages under operating expenses does this include cpp, ei, tax, vacation pay? Does it include the employer portion as well?

 

Seniors and students

The salary expense will include the employer portion of CPP and EI.  The employee portion has already been deducted from their pay, as has the amount for income tax.  

If you had an employee and paid them $10,000 for the year, you would have deducted from that $10,000 amounts for CPP and EI and income tax.  These amounts are already reflected in the $10,000.  So it is only the employer portion for CPP and EI that you would add to the $10,000.

Seniors and students

My accountant said to create another expense category for the CPP and EI called Employee Benefits to account for it there, rather than adding it to the Wages category. Thanks for your response.

Seniors and students

That is perfect for your own bookkeeping, as it makes it easier to reconcile...on the tax return it is fine to combine these as one expense.

Seniors and students

And rather than call it employee benefits, as it may be confused with a taxable benefit, perhaps label the new account Employee Expenses or Payroll Expenses