WHAT IS PAYROLL ACCOUNTING?

Are Your Payroll Reconciliations being completed Monthly?

Payroll accounting involves a company's recording of its employees' compensation including:

• gross wages, salaries, bonuses, commissions, and so on that have been earned by its employees


• withholding of payroll taxes such as federal income taxes, Social Security taxes, Medicare taxes, state income taxes (if applicable)


• withholding for the employees' portion of health insurance premiums, employees' contributions to savings plans, garnishments of salaries and wages, employees' contributions to United Way, etc.


• employer's portion/expense for Social Security taxes, Medicare taxes, state and federal unemployment taxes


• employer's portion/expense of fringe benefits such as health and dental insurance, paid holidays, vacations and sick days, pension and savings plan contributions, worker compensation insurance, etc.

​Whether your payroll is issued monthly or bi-weekly, it is critical for each business to reconcile their balance sheet accounts and understand the monthly expenses as it relates to payroll.  If the expenses are not being accrued, they should be. 

​This process is more efficient with the use of an accounting or payroll software, however, if you are an entrepreneur completing this task manually - we offer solutions.

Opportunity often comes disguised in the form of misfortune, or temporary defeat.”  — Napoleon Hill

Source:  AccountingCoach