Payroll taxes payable definition
/What are Payroll Taxes Payable?
Payroll taxes payable is a liability account that contains the combined total of payroll taxes deducted from employee pay and the employer portion of payroll taxes. The balance in this account is increased by the addition of new liabilities, and reduced by payments made to the applicable governing authorities. Thus, the account only contains unremitted payroll taxes.
Presentation of Payroll Taxes Payable
The payroll taxes payable account is always classified as a current liability, since the amounts in it are due in less than one year. The receiving government entities usually only allow a business to retain payroll taxes for a few days, so this account can never be classified as a long-term liability.