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JFO explains payroll-tax reconciliation step in year‑end close for new childcare payroll tax
Summary
JFO explained a technical bookkeeping approach for a new payroll tax: employers remit payroll withholding and the payroll tax together to the tax department, requiring JFO and tax staff to use an internal consensus to allocate amounts when closing the general fund prior to final reconciliation.
Emily Burns explained a technical timing issue introduced by a new payroll tax related to childcare premiums: employers remit income-tax withholding and the payroll tax together, and the tax department reconciles the split quarterly.
"This was the first year because the payroll tax was new...on June 30, that reconciliation process hadn't occurred...but we wanted to close the books on the general fund," Burns said. To avoid misallocating balances at year end, JFO, tax and finance staff developed an internal consensus approach to estimate how much of receipts should be treated as payroll tax versus general fund revenue; final reconciliation happens once filings and quarterly processes are complete.
Burns said the bill language under consideration lays out a stepwise process for finance and management to account for the payroll tax during the close so the "right money ends up in the right buckets" and the general fund can be closed in a timely way. She acknowledged the approach is technical and that staff can walk through more detailed reconciliations if the committee wishes.
No policy choice was made; the briefing described accounting procedures to ensure correct fund treatment during year‑end close.
