Running payroll can sometimes feel complicated, especially when you're juggling everything from feeding livestock to managing crops. We want to make sure payroll with FarmRaise Payroll is as simple and clear as possible, so here’s what you can expect when running payroll and how it will show up in Tracks.
How Many Transactions Will Come Out of Your Bank Account?
When you run payroll, you’ll see one transaction per employee from your bank account. This single transaction will include both the employee’s pay and the taxes owed for that employee. Gross pay, representing the total wages before deductions, and net pay, the amount received post-deductions, are key to understanding these transactions. Payroll transactions also account for taxes, ensuring a complete record of your payroll obligations.
How Will These Transactions Appear in Tracks?
The way payroll transactions show up in Tracks depends on how your bank account is set up:
1. Linked Bank Account
If you’ve linked your bank account to Tracks, the transaction for each employee will appear as a single entry in your records. You’ll then need to split that transaction into two parts, since on your Schedule F (for tax reporting), hired labor and payroll taxes are reported separately. Splitting is essential not only for tax reporting compliance but also to prevent duplication in your accounting records. Retaining payroll transactions while avoiding duplication with manual bank check entries ensures accurate financial records.
Here’s a breakdown:
Hired labor: This portion covers what you're paying your workers for their hard work.
Payroll taxes: These are the taxes that come out with each payroll run. Payroll taxes encompass federal, state, and any applicable local taxes that employers are mandated to withhold and remit. Hired labor includes wages paid directly to employees before deductions.
FarmRaise Payroll makes this easy by allowing you to split the transaction directly in Tracks, so everything’s accounted for. Employing these reconciliation principles not only simplifies record-keeping but also prevents errors like double counting expenses in your financial reports.
2. Manual Bank Account
If your bank account is not linked, but you chose during the payroll onboarding process to automatically add payroll transactions, then Tracks will do the heavy lifting for you. The transactions will be added automatically when you run payroll and will already be split into hired labor and payroll taxes. This saves you time and ensures accuracy when reporting your expenses. Avoiding duplication in this automated process ensures your records reflect accurate payroll expenses without inflating totals.
Examples:
You can turn this setting on under 'Account Settings'
Why Does This Matter?
As a farmer or rancher, you’re already balancing a lot—caring for animals, planting crops, maintaining equipment, and managing cash flow. FarmRaise Payroll aims to take one more task off your plate by streamlining the payroll process and making sure your finances stay organized and accurate for tax reporting. Proper reconciliation of payroll transactions not only supports tax readiness but also prevents accounting issues stemming from duplicate entries.
With a straightforward process for splitting into the correct categories, you can stay focused on what matters most: growing food, taking care of your land, and running your farm smoothly.
If you have any other questions, reach out! We’re here to help make farm and ranch finances a little simpler.