Accounting for 401k Employer Match & Profit Sharing

olllllllo

We have a S Corp with a single employee.
For Employee 401K Contribution - A "Deduct from Pay" for 401k contribution was added under Benefits and Deductions. The employee contribution for 401k is shown in Payroll (done by wave). Then when the actual transaction to take out the 401k employee contribution comes in, it is categorized as payroll liabilities.

Question 1
For Employer 401k Match - Funds were moved from business account to 401k account as a one time match for 25% of salary. How to categorize this transaction correctly? what is the correct way to account for this?

Question 2
The employee will also get a profit sharing by end of year. what is the correct way to account for this?

AlexL

Hey @ollllllo , although we do offer 401k in Payroll, we don't offer 401k matching which is why when you run your Payroll the accounting steps aren't actually automated for this. I can confirm that you would need to create a Journal Transaction, but the contents of what exists in the JT would need to come from an accountant or CPA as this isn't functionality we cover within the software.