Payroll that ends with a W-2 file, not a phone call

AcboBooks is bookkeeping software, not a payroll service or a tax adviser. Tax tables change every year; verify figures against current IRS publications and validate electronic files with the SSA before filing. See the licence agreement.

1. Set up

Company payroll settings

• Employer EIN, state, and pay schedule (weekly, bi-weekly, semi-monthly, monthly).
• Liability accounts for federal withholding, Social Security, Medicare; expense accounts for gross wages and employer taxes. AcboBooks creates defaults you can rename.
• The payroll bank account (where net pay is paid from).

Employees

• Legal name, address and SSN (needed for the W-2; stored only in your company file — see Security).
• Form W-4 details: filing status, multiple-jobs checkbox, dependents amount, other income, deductions, extra withholding.
• Pay type and rate: hourly or salary; overtime rate if applicable.

2. How withholding is computed

Federal income-tax withholding uses the IRS Publication 15-T percentage method for the current year's tables, applied to the employee's W-4 answers. Social Security is withheld at the statutory rate up to the annual wage base — AcboBooks tracks year-to-date wages per employee and stops at the cap automatically. Medicare has no cap.

Each paycheque posts: gross wages (expense), each withholding (liability), employer taxes (expense and liability), and net pay (bank). It's an ordinary balanced journal entry, visible in the general ledger like everything else.

State and local taxes are entered as fixed amounts or percentages you maintain; AcboBooks does not ship state tables.

3. Running payroll

1. Employees → Run Payroll. Pick the pay period and the employees to pay.
2. Enter hours (hourly) or confirm salary; add bonuses or reimbursements as separate lines.
3. Review the preview: gross, each tax, net. The year-to-date column shows where each employee stands against the Social Security cap.
4. Post. Print pay stubs or cheques, or record the direct deposit.

During the free trial, payroll runs in preview — you see the figures but year-end files are generated only with a licence.

4. Paying the liabilities

Employees → Pay Liabilities lists what you owe by agency and period. Paying from there clears the liability account and records the bank payment. Deposit schedules (monthly vs semi-weekly) are yours to follow; AcboBooks shows the balances, not the deadlines.

5. Year-end: W-2 and EFW2

1. Reconcile payroll: the sum of all paycheques for the year must equal the wage and tax totals you reported on quarterly returns.
2. Employees → Year-end → W-2. Review each employee's boxes; fix addresses and SSNs now.
3. Generate the EFW2 file. AcboBooks writes the RA / RE / RW / RT / RF records in the SSA's fixed-width format.
4. Validate with SSA AccuWage Online before uploading. AccuWage catches formatting problems the SSA would reject.
5. Upload through SSA Business Services Online, and give each employee their copy.

AcboBooks is not a filing transmitter; the upload is yours to do.

6. Each January

• Install the year's update: new withholding tables and wage base.
• Ask employees for a fresh W-4 if their situation changed.
• Reset state and local fixed amounts if your state changed rates.

Canada

Canadian payroll (CPP, EI, federal/provincial tax tables, T4) is in development. Canadian companies can use AcboBooks for everything else today and record payroll from a provider's summary as journal entries.