What is a Payroll Journal?

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  • Written By: Osmand Vitez
  • Edited By: Kristen Osborne
  • Last Modified Date: 23 September 2019
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A payroll journal is a special accounting journal that contains information relating to the company’s human resource department. Companies use a payroll journal to record information relating to wages, salaries, payroll taxes, benefits and other information. Special journals allow companies to separate information to easily review and assess their company’s performance. Companies with several dozen or hundred employees may use a number of payroll journals to break information down according to specific groups and/or types of information.

The payroll journal offers three significant benefits to companies. Companies can divide labor classes, save time posting information to their general ledger and reduce data entry errors. Many companies separate their labor types in accounting journals and ledgers. This allows the company to maintain specific records relating to type and number of employees used to complete specific business functions. Basic journal separation includes salary and hourly employees. Additionally, these journals can also separate employees by division, department or other specific information.


Human resource departments are usually responsible for maintaining a company’s payroll information. Human resource managers and employees track information relating to the hours worked by each individual in the company, commission or bonuses, benefits and other information. Using a payroll journal allows human resource managers to review this information separately from the company’s other accounting information. The human resource department usually prepares journal entries for each payroll period and posts this information into the payroll journal. Once the payroll journal is complete for the entire accounting period, human resource managers will turn this information over to their accounting department for inclusion in the company’s general ledger.

Data entry errors may be reduced by companies using a payroll journal. Payroll journals can be reconciled separately from the company’s general accounting ledger. This reconciliation ensures only payroll information is included in the journal. Companies that include regular accounting information with payroll information can create a difficult and time consuming process when reviewing payroll information. Business owners, directors and executive-level managers may also want to review payroll information separately from regular accounting information.

Payroll information is included into a company’s general ledger to ensure all information from the special journal is included on the company’s financial statement. Payroll information is included on a company’s income statement and balance sheet. The income statement includes information relating to wages expense for the current accounting period. The balance sheet includes information relating to wages payable or benefits payable. Benefits payable usually refers information such as employer contributions to health care or retirement plans.


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