The pay period for these employees is the half-month that ends on payday. For many companies, the total cost of an employee can be 125% to 150% of the gross earnings. Notice the Wage Expense is debited for the gross pay. A payroll journal entry includes employee wages, direct labor expenses, FICA expenses, payroll taxes, and holiday, vacation and sick days in the Debit section. Examples of Payroll Journal Entries For Salaries. A salaries payable entry will tell you exactly how much money you owe to your employees for services performed. Payroll Journal Entry. Salaries Payable Journal Entries. Cash balance decreases by $3,500. (For QuickBooks, simply click on âCompanyâ then go to âMake General Journal Entriesâ and enter your payroll entry.) Paid $3,500 salaries. There is one salaried employee in the warehouse department with a gross salary of $48,000 per year, or $2,000 per pay period. Suppose in the above example the net wages due to the employee were 1,100. NOTE: In the following examples we assume that the employee's tax rate for Social Security is 6.2% and that the employer's tax rate is 6.2%. The accrual journal shown above debits the rent expense account which represents the cost to the business of using the premises for the month. The journal entry to record this is as follows: Of course, these added costs also need to be entered in the accounting records. Normally the employee would be paid the amount of 1,100, however in this case the wage advance of 300 made earlier in the month needs to be deducted from the amount due, and the employee will be paid the balance of 800. If the company debits wages and salaries expense for $7,500, it must credit wages and salaries payable for $7,500. The payroll accounting journal entries would be as follows: Each pay period, pay is calculated based on time cards and salary amounts and then expensed. These journal entries ensure appropriate income statement and balance sheet entries. Wages are debited to increase the expense account, ⦠There are four salaried employees in the Selling & Administrative Department with combined salaries of $9,000 per pay period. As you can see, the employer's cost of an employee goes well beyond the amount reported on the pay check. Payroll journal entries are used to record employer-related compensation expenses and employee deductions. Let's assume our company also has salaried employees who are paid semimonthly on the 15th and the ⦠Here is the payroll journal entry to record the payment of the paycheck: Payroll Journal Entry Example 1. More Examples of Journal Entries Accounting Equation Double Entry Recording of Accounting Transactions The difference between the gross pay and the net pay is the taxes that were withheld from the employeeâs pay. Basics of Journal Entries Accounting Journal Entry Examples. The credit entry to the accrued expenses reflects the liability of the business to pay the supplier (landlord) for the ⦠Results of Journal Entry. As an example of payroll accounting, if gross pay is 2,000, employee tax is 500, and other deductions are 100, then the net pay due do the employee is 1,400. Payroll Journal Entry Examples: ABC Company has one employee, Mary Smith, that is paid weekly. Below is the entry ⦠Keeping accurate payroll records is important because through your payroll, you are paying bills that, if not paid properly, can cause major problems for your company. This amount will be recorded as various liabilities. --> Decrease in Assets Salaries Expense account balance increases by $3,500. Crediting wages and salaries payable increases the companyâs obligation to pay salaries and wages to employees. Credit wages and salaries payable for the same amount as the debit in Step 3, as credits must equal debits. 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