Payroll starts with gross wages earned by employees. Withholdings reduce the cash paid to employees but do not reduce wage expense. They create liabilities that the employer must later remit. Net pay equals gross pay less employee deductions. Employer payroll taxes are additional business expenses with their own liabilities.
Separate the wage accrual from the payment when wages cross a reporting date. Recording only net pay as expense understates both wages and payroll obligations. The amounts in these exercises are supplied fictional payroll registers, not current tax rates or filing instructions. In real work, reconcile the payroll report, bank payments and liability accounts before remitting anything. A deduction held for health insurance also remains payable until sent to the provider.