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Accounting & Bookkeeping & Small Business Forum
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mmpgem
Joined: 29 Sep 2008
Posts: 1
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| Posted: Mon Sep 29, 2008 1:02 pm Post subject: Tax on salary advance |
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If i've to pay an employee a salary advance which will be deducted from the salary, does he/she have to pay witholding taxes?, please advice and thanks for you valuable time.
Below is the statement I read from a forum...
"A salary advance payment is not tax-reportable, and thus the advance itself has no impact on wage or tax reporting. The wages on which the advance is based, when paid through the Payroll system on the next payroll cycle, is the reportable payment". |
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Richard Noot
Joined: 20 Aug 2005
Posts: 892
Location: Minnesota
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| Posted: Mon Sep 29, 2008 8:48 pm Post subject: Re: Tax on salary advance |
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mmpgem wrote: If i've to pay an employee a salary advance which will be deducted from the salary, does he/she have to pay witholding taxes?, please advice and thanks for you valuable time.
Below is the statement I read from a forum...
"A salary advance payment is not tax-reportable, and thus the advance itself has no impact on wage or tax reporting. The wages on which the advance is based, when paid through the Payroll system on the next payroll cycle, is the reportable payment". no You as the employer pay the withholding tax. Yes wages are taxable income once they are received. I suggest you find someone to do your books that knows what they are doing before you find yourself in hot water. |
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