Software: QuickBooks Canadian version
For Singapore user who uses the QuickBooks Canadian version, you can’t use the Intuit Payroll services (for Canada only).
However, if you only have a handful of staffs, you may consider using the Journal method which I mentioned in my earlier blog post or using the same method which I used in MoneyWorks accounting software. That is, using a Write Cheque method.
If John Tan’s salary is $2,000.00 per month, CPF Employer contribution is 16%, CPF Employee deduction is at 20% and CDAC deduction is $1.00 per month.
Then, in your Write Cheque window, Expenses tab:
Salary (Expense) 2,000.00
CPF Employer Contribution (Expense) 320.00
CPF Payable (Current Liability) -721.00
CPF Payable account is consist of 320.00 (CPF Employer at 16% of the salary), 400.00 (CPF Employee deduction at 20%) and CDAC deduction of $1.00 from the employee.
A negative value is needed in CPF Payable account for this case; this is to deduct the cheque amount and to credit the CPF Payable account.
The double entry for this case will be:
Debit Salary expense account at 2,000.00
Debit CPF Employer Contribution expense account at 320.00
Credit CPF Payable current liability account at 721.00
Note: QuickBooks is based on transaction date to update the account; you need to ensure the cheque payment date to staff is fall on the same month as the salary expense. If accrual is needed, then, Journal will be required to accrue the expenses to your current liability account.
When preparing cheque payment to CPF board, you will be using CPF Payable account. This will debit the CPF Payable account and credit the Bank account.