Double Entry for Payroll

The payroll journal can be a tricky one to get right, but it is critical to reporting the liabilities and profits of a business correctly.

The double entry for payroll liabilities are:

Dr Gross Wages (profit & loss account)

Dr Employers NI (profit & loss account)

Cr PAYE & NI Control (balance sheet)

Cr Net wages control (balance sheet)

The double entry for payments of net pay and PAYE liabilities are:


Dr Net wages

Cr Bank

Anita is a Chartered Accountant, turned blogger and creator of the ever popular free Go Self Employed Email Mini Course, which has been completed by hundreds of attendees all over the UK. Using her 10 years experience in accounting, tax and operations for Small Businesses, Anita is on a mission to make finance simple for the self employed, so they can stop stressing about tax & finances and focus on building profitable businesses which will give them the lifestyle they dream of.