Please note the edit to my previous post - you will report Gross Wages (Box 3) on Form 1120S Line 8. The difference between Box 3 and Box 1 is due to tax differences from retirement contributions.
Employee contributions to a tax-deferred retirement plan are included in Gross Wages, but are not expenses to your business that are reported separately on Form 1120S. But matching funds paid by the business would be a compensation expense under Benefits. Payroll taxes (employer portion only) are also business expenses.
In summary:
Employee wages, employer portion of taxes, and employer-paid benefits are considered Employee Expenses reported on the business return.
Employee deductions for employee portion of taxes and employee-paid benefits (health insurance, retirement, etc.) are included in gross wages, but not recorded as business expenses. Most businesses record these items as liabilities until they are paid to the appropriate agency.
For more info, see IRS Instructions for Form 1120S, Line 7 & 8.
[Edited for clarity and to include IRS link 2/20/2022 | 7:39 am PST]
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