Payroll Accounting Examples You Must Know

 

Payroll Accounting Examples.Payroll and knowing how to account for payroll are very important in those companies that use workers in the development of their economic activity.Payroll accounting Payroll accounting requires the provision of certain information relating to employee’s attendance time, details of absenteeism, hourly rates of pay, and details of various deductions such as tax and national insurance.

 

Clock cards or absenteeism reports provide the basic information for the calculation of attendance time, and the employee’s personal record card provides details of the various deductions. Where incentive payment systems are in operation, piecework tickets contain details of the number of items produced by each employee, and this is multiplied by the rate per item to give the total weekly wage.

Where bonus schemes are in operation, the total payment will be based on an attendance time (the time rate wage) plus a bonus. The time rate wage is obtained from the clock card and the bonus details from the job card. Under a bonus scheme, a set time is allowed for each job and a bonus is paid based on The time allowed for a specific operation is 20 hours and the actual time taken by an employee was 16 hours. A bonus system is in operation where employees receive a bonus of 50% of the time saved.  In most organizations the payroll accounting function is now likely to be carried out by a computer.

 

Payroll Accounting Examples

Ledger accounts Is Used To Post Payroll. To post the payroll we will have to know the accounts that will collect each of the items involved in the payment of a payroll.

Table of Contents.
  • This is how payroll is posted.
  • Accounting.
  • Comments and clarifications.
    • Accounting for withholding at source for salaries.
    • Accounting of warrants and judicial seizures.
    • Accounting for other payroll items.
  • Third parties in the posting of payroll.

For the accounting of the payroll we will use the values ​​determined in the settlement of the payroll that we assume yields the data below.In this example, we assume that the employee belongs to the administrative part, so account 51 of the Colombian single account plan will be used.

The following account groups will be used in the posting process.

  1. 1105 (Banks).
  2. 2370 (Withholdings and payroll contributions).
  3. 2610 (Provisions for labor obligations).
  4. 5105 (Personnel expenses).

If it were labor that is accounted for as part of the cost, account 6105 would be used.

 

Accounting Settled

The posting of the payroll is carried out in the following way depending on the concepts settled:

Code Account name Debit Credit
250505 Salaries to pay 885,916
237005 EPS contributions 106,250
237006 ARL 4,437
237010 Parafiscal contributions 76,500
238030 pension funds 131,751
261005 layoffs 75,037
261010 Interest on severance pay 9,004
261015 Holidays 29,190
261020 Premium services 75,037
510506 salaries 700,000
510515 Extra hours 50,000
510518 commissions 100,000
510520 transportation assistance 102,854
510530 layoffs 75,037
510533 Interest on severance pay 9,004
510536 Premium services 75,037
510539 Holidays 29,190
510568 ARP 4,437
510569 EPS contributions 72,250
510570 Pension fund contributions 98,813
510572 Compensation funds contributions 34,000
510575 ICBF 25,500
510578 Sign 17,000
Equal sums 1,380,322 1,380,322

 

At the time of accounting for the cost of the course, the entry to be made by the company would be as follows

Accounting Record – Daily Book Should To have
(649) Employment training course 420
to (572) Banks 420

 

At the time of deducting social security, the entry to be made would be the following

Accounting Record – Daily Book Should To have
(640) Wages and salaries 1833.33
(642) SS in charge of the company   550
to (476) O.SS creditors 404.99
a (4751) Hp Payroll withholdings 260.15
a (465) Remuneration pending payment 1298.19
a (755) Income from personnel services 420

Accounting for a payroll in advance.

At the moment in which the company delivers the advance to the worker, the entry that will be made to account for the advance, let us imagine that it is 300 euros, would be the following.

month 3

Accounting Record – Daily Book Should To have
(465) Remuneration advance 300
to (572) Banks 300

 

When the company pays the payroll, it will have the right to deduct this advance from the payroll to be received.

Accounting Record – Daily Book Should To have
(640) Wages and salaries 1833.33
(642) SS in charge of the company   550
to (476) O.SS creditors 824.99
a (4751) Hp Payroll withholdings 260.15
a (465) Remuneration pending payment 998.19
a (460) Remuneration advance 300

Accounting for a payroll with settlement

Let’s imagine that it is too much to imagine why it is more possible that when dismissing the worker we have to pay him 100 euros as compensation for dismissal in this case the entry to be made would be

Accounting Record – Daily Book Should To have
(640) Wages and salaries 1833.33
(642) SS in charge of the company   550
(641) Settlement 100
a (4751) Hp Payroll withholdings 260.15
a (465) Remuneration pending payment 1398.19
a (476) Creditor SS Organizations 824.99

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