Payroll Journal Entry

What is Payroll Journal Entry?

A Payroll Journal Entry is an entry within the payroll accounting system. All payroll transactions such as deduction of employee salary, compensation paid to employees, deductions, and therefore the amount paid to the government for various payroll-related taxes.

An accountant records payroll entries into their ledger, and they use payroll journal entries to document payroll expenses. Each journal entry contains debits and credits, which need to equal one another to remove errors. These things are recorded in the Payroll journal: 

• Employee Salary– Wages, Salaries, Bonuses, Commissions, Paid Day Off, and Other Taxable income. 
• Employer Taxes– Medicare, social security, state unemployment taxes, etc. 
• Employer Benefits– Life assurance, insurance, education assistance, etc. 
• Payroll Taxes– Social security, federal income, Medicare, state income taxes, etc. 
• Employee Deductions– Pension plan, Insurance, etc. 
• Other Deductions– Spousal support, outstanding tax liabilities, support payment, etc. 

Payroll accounting helps you retain track of employee compensation and other payroll costs.

Also, See: Payroll Outsourcing | Payroll Reconciliation