What is a payroll journal?
A payroll journal is the general ledger entry that records a pay run: gross wages and employer costs as expenses, usually split by department or entity, and the amounts owed for net pay, taxes withheld, employer taxes, pension and benefit contributions as liabilities. Those liabilities clear when the net pay and the deductions are paid out.
Also calledpayroll journal entrywages journalpayroll posting
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- Debits
- Gross pay and employer costs
- Credits
- Net pay, taxes, deductions payable
- Category
- Payroll
What a payroll journal contains
A typical journal debits gross salaries, overtime and bonuses, and employer social security and pension or benefit costs, to expense accounts by cost centre. It credits net pay payable, income tax and employee social security withheld, employer social security payable, pension and benefits payable and any other deductions, such as student loans or court orders. When net pay goes out the net wages control account is debited and cash credited, and the same happens for each tax and pension payment, so every liability account should return to zero. A balance left on one of them points to a missed payment or an error, which is why payroll reconciliation starts there. Most payroll platforms, including Gusto, Rippling, PayFit and Personio, post the journal to ledgers such as Xero, QuickBooks and NetSuite automatically through an integration.
Common questions
Should a payroll journal be posted per employee?+
Usually not. A summarised journal by department, entity or cost centre keeps salaries confidential in the ledger, while employee-level detail stays in the payroll system.
What is a net wages control account?+
A liability account credited with net pay when the payroll journal posts and debited when the payment leaves the bank. It should be zero after each pay run is paid.
When should the payroll journal be posted?+
In the period the pay relates to, normally on or before the pay date. Pay earned but not paid at month-end, such as overtime paid in arrears, is accrued.
Software that posts payroll journals
GustoPayroll, benefits and HR built for small businesses.Profile →
RipplingPayroll, benefits and IT unified on one employee record.Profile →
PayFitAutomated European payroll, leave and compliance.Profile →
PersonioEuropean HR platform with payroll and employee administration.Profile →
XeroCloud accounting for small businesses with a large app ecosystem.Profile →
NetSuiteCloud ERP for mid-market companies outgrowing basic accounting.Profile →Part of Accountio’s accounting technology coverage · Glossary
