LTD Benefits paid 100% by employee

Looking to find information on the correct posting for LTD Benefits 100% paid by employee.

The LTD payment by employee is being posted to LTD Payable account 2000 through the Payable module

The LTD payment made to the insurance company is being paid in the vendor module and expensed to the 5000 account.

With this structure I have both accounts accumulating. What would be the solution to this? I would think that my payable account would need to be reduced to zero each month once I paid the invoice.

Please help :)


  • I believe the lability account is linked in payroll but the expense is not

  • If you wish you can leave the setup as is and make a general journal entry at the end of each month and debit the liability account and credit the expense account.  If the employees are paying part of the actual bill, then the company's portion is smaller than the total.  So it makes sense that the expense is less than the bill each month.

    I usually set it up so that the deduction from the employee paycheques credit the Expense account in the setup of the program rather than crediting a liability account in this scenario.  The logic here is that when you deduct the amount from the employee, you do not owe it to someone external to the company because the company already paid the full bill.  It is owed back to the company to reduce the expense.  Therefore you might as well send it there on each cheque.

  • So at Year End the LTD expense account will be zero as the expense was paid entirely by the employees?

    The company does not pay any of that benefit.

  • It looks like that is how you want to have it set up.  If you have three employees and the total bill is $300 then you will expense the $300 to the expense account for Employee benefits.

    Then when you take $100 from each employee on their paycheque(s) that amount should credit the same expense account if you relink the deduction from the liability account to the expense account.  Going forward you need do nothing more to handle this as long as the dollars match.

    For the past entries, I would do a general journal entry to move the money from the liability account to the expense account for each month applicable.  Debit the liability and credit the expense.