How do I read a Payroll Liability or Pre-Process report?

When you first join Journey Payroll & HR, you will be sent a preprocess report (also called a Liability Report) to approve before finalizing your first payroll. What is this document, and what's information does it cover? Let's take a closer look at each part so we can understand the entire document.

The first page is the summary page. Let's start with the top left.

First thing we have is your company name and address, along with Journey's account number. Good idea to make sure that's all correct.

Moving along, we have the Payroll Dates box

We have a couple items here:

  • Check Date: The date pay will be deposited or live checks will be printed
  • Period Start Date: The first day in the pay period that this paycheck covers.
  • Period End Date: The last day in the pay period that this paycheck covers
    • Don't worry about the (1) - it's only a placeholder for if your company has overlapping pay periods for different departments, which is extremely rare.
  • Federal Deposit Freq: How quickly after the pay date the Federal government requires taxes to be deposited.
  • Federal Deposit Method: How Journey deposits your taxes - Total Tax means we withdraw all the funds at one time, then deposit them as they come due. EFTPS means we submit the payment information on the payroll date, but the payment is withdrawn by the tax authority on the day it is due.

Moving to the right, we have a Payroll Statistics Box:

Items in this box are:

  • No. of PR Checks: How many live Payroll (PR) checks are printed on this payroll
  • No. of Misc Checks: How many miscellaneous checks were printed on this payroll
  • No. of Tax Checks: How many tax checks were printed on this payroll
  • No. of Adj. Entries: How many adjusted entries are included on this check. These could be corrections from previous payrolls.
  • No. of Void Entries: How many voided entries are on this payroll
  • No. of DD Vouchers: How many Direct Deposits have been processed on this payroll
  • Total Check Net: The total of paychecks minus taxes and deductions
  • Total Misc Net: Total of miscellaneous payments minus any deductions
  • Total Adj. Net: Total Net of any Adjustments
  • Total Void Net: Total Net of any voided items
  • Total PR Net: Total Net Payroll amount including all miscellaneous, adjustments, deductions, and void amounts.
  • Total PR Gross: The amount of payroll before any deductions.
  • Invoice Amt: Journey Payroll & HR's invoice amount for this payroll which will be deducted along with your payroll amount.

Moving down and to the left on the page, we have the Federal Tax Deposit Liability (941) box:

This box details the Federal Taxes due on this payroll:

  • Federal Withholding Tax: Total amount of Federal Withholding Tax due on this payroll. Journey uses the W4 information provided by the employee to calculate the withholding amounts.
  • Earned Income Credit: Not generally used
  • Social Security (Employer Portion): Total of all Social Security tax that the employer is required to pay. Currently, the Social Security employer contribution is 6.2%
  • Social Security (Employee Portion): Total of all Social Security tax that the employees pay. Currently the employee contributes 6.2%
  • Medicare (Employer Portion): Total of all Medicare tax that the employer is required to pay. Currently that rate is 1.45%
  • Medicare (Employee Portion): Total of all Medicare tax that the employee is required to pay. Currently the rate is 1.45%.
  • Cobra Premium Assistance Credit: Tax credit provided to employers and insurers to cover the cost of COBRA continuation coverage
  • Total PR Federal 941 Liability: Total amount of Federal taxes reported on the quarterly filing, which is form 941 for most businesses. It could also be form 942 or 943.

The next box is the unpaid liability box:

This box shows the total from the Federal Tax Liability, and describes when the amount will be withdrawn from your account. Most of our customers will have Payroll, taxes, and Journey's invoices withdrawn all on the same day, one day prior to payroll. If we are not impounding your total check, we will withdraw the tax amount when it is due.

The next box shows the Federal Unemployment Tax:

Federal Unemployment Tax is required to be collected for employees until they have been paid $7,000 in the calendar year. Journey deposits FUTA taxes quarterly, and files the annual return, the form 940, as part of year-end tax filings.


Next on the sheet is the State Tax Section.

Depending on your state, there will be different boxes listed in this section. If you operate and pay employees in multiple states, this section may cross several pages. In general, it will follow the same format as the Federal tax section. Keep in mind that the notes in the Liability section detail when we will withdraw the taxes from your account. This is usually done at the same time as Federal Taxes, but it could potentially be a different day.

One other item to note is that the category names in the State section are usually the generic term for that category of payments. In this example, Colorado State Disability Insurance (SDI) is the generic term for Colorado Family and Medical Leave Insurance (FAMLI).

Next on the sheet is the final line:

This is the bottom line - literally. The right hand side shows the Total Bank Deposit: how much money will be withdrawn for this payroll. It's this amount that we will withdraw to process payroll - what needs to be in the bank before payroll is finalized. Total Tax Deposit (which is already included in the Total Bank Deposit) is separated on the left.

That covers the pre-process report! If you have questions, you are welcome to reach out to your implementation or payroll specialist.

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