Payroll Ledger vs. General Ledger

The Payroll Ledger specifically deals with employee payroll information. It tracks staff names, salaries, and payment schedules, whilst the General Ledger encompasses all financial transactions for the company, including payroll. It organizes data by type, liabilities, equity, revenue, and expenses.

Payroll Journal Entries

Are crucial records of all payroll-related expenses within an organization. It encompasses salaries, benefits, taxes, and deductions. Here’s what you need to know:

Employee Compensation: This includes monetary compensation (such as bi-weekly salaries) as well as non-monetary rewards like extra time off or bonuses.

Benefits: These can be individual or team benefits, such as retirement plans, stock options, or insurance policies.

Employer Taxes: Money paid by the organization to the government as taxes (e.g., PAYE, unemployment taxes, etc.).

Payroll Taxes: Expenses directly tied to employee salaries, such as pension, provident fund, medical aid, etc.

Deductions: Withholdings from pay checks for taxes and other purposes.

The General Ledger

Is the heart of financial record-keeping. It encompasses all transactions, including payroll entries. Here’s how it relates to payroll:

Recording Payroll Entries: Your general ledger lists all payroll journal entries. It’s like a comprehensive financial diary for your organization.

When running a business, keeping payroll information organized is essential for budgeting and financial stability. Whether you’re a small business owner or part of a larger organization, mastering payroll accounting ensures smooth operations and compliance.

Red Dot Now provides accounting, payroll and tax compliance services using the best of breed online technology.

Should you want to discuss this, or any of our services further, contact Ryan Coates on e-mail at ryan@reddotnow.com