July 23, 2020
Our owners pay is included in the payroll gross pay totals we received from our payroll provider. If we are supposed to list owners’ pay in Tab 7 of the model, how does that get matched with the amounts listed in the Pay Cycle 1 Input tab? Should we include the W-2 pay to owners paid by our payroll provider in the Pay Cycle 1 Input tab or the Owners Comp tab 7?
Posted by Armanino Financial Advisory Team
Any salary paid to an owner by your payroll provider is presumably reported as W-2 earnings at the end of the year, and as such should be reported on the Pay Cycle 1 Input tab so the amounts entered in a payroll cycle column match the total at the top (as denoted by a $0.00 in the CheckSum cell). The amounts that should be listed in the Owners Comp tab 7 of the model are non-salary amounts that an owner receives that are reported on their Schedule C or as guaranteed payments on a K-1.