How Do You Record Entries Into Payroll Journals?
Payroll is an intricate task that requires the employer to pay his employees’ wages on time and accurately. He must also withhold and pay taxes to the government. Furthermore, payroll consists of other transactions, such as retirement benefits and vacation and sick/personal time. A payroll journal helps to streamline the many different activities that occur within the payroll system. This process is commonly called “payroll accounting.” Create headings for the payroll journal. Typical headings include date, account type, debit and credit. Enter total salaries and wages—the employees’ gross amount (before deductions amount)—as a debit. Include a labor expense column for administrative cost, engineering labor, manufacturing labor, or contract labor. Record these as a debit. Enter all deductions as a credit. Deductions include federal and state taxes withheld, retirement contributions and benefits payments, such as medical and dental. The total is the net payroll amount. Create a sepa
