Withholding accounts -- as liability and not expense accounts -- figure into total liabilities, which appear on the company's balance sheet, one of several financial statements generated each month. They are also combined into the amount of the liabilities listed on the shareholder's equity financial statement.
Withholding accounts do not represent monthly expenses generated by the company or business. Instead, they signify accounts where funds extracted from employee paychecks are kept until they are paid, which makes them liabilities. These accounts include payroll taxes, wage garnishments and child support, for example. The amounts in these accounts are held in trust by the company until they are due, representing an amount the company must pay on behalf of the employee. Many liability accounts have the word "payable" as part of the account name. Other liability accounts include customer deposits, notes payable, income tax, interest payable and warranty liabilities, for example. Liability accounts signify a demand against the company's assets.