Payroll expense category

[Patrick_S76]

I’m a sole proprietor running payroll for assistants, who help me out a few times per year. I receive invoices from my payroll service that break down into: Employee Salary + 25% Payroll Taxes & Handling.

Does the whole invoice go into one expensive category or do I have to split it up? Which expense category/categories does it belong to?

[Anonymous_ · Accepted solution]

Did the payroll service provide a breakdown between gross salaries/wages and their service charge ("handling")?

The total (gross) salaries/wages would be reported as such on Line 26 of Schedule C (or as employee wages in TurboTax).

The charge for the payroll service would most likely be reported as Legal and Professional Services.

[Patrick_S76]

@Anonymous_Thanks!

Payroll Taxes and Commission on Gross Wages is one item on the invoice and not broken down. However according to my contract with the payroll service the 25% break down to: Payroll Tax Processing Fees: 15.85%; Workers Compensation Insurance: 6.15% and Admin Fee: 3.00%. Do I have to calculate that and put them different categories (which ones) or could the 25% be all Legal and Professional Services?

[Anonymous_]

Gross wages is self-explanatory, but I have no idea what they are charging for their services.

What is the "Admin Fee" and the "Processing Fee"?

The worker's comp would be entered separately.

[Patrick_S76]

I guess "Admin Fee" and the "Processing Fee" is how they make their money? I'm thinking this could be "Legal and professional fees" in TurboTax? 

[Anonymous_]

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@Patrick_S76 wrote:

I guess "Admin Fee" and the "Processing Fee" is how they make their money? I'm thinking this could be "Legal and professional fees" in TurboTax? 

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Yes, that would be correct if those charges relate to accounting services.