Payroll accounting
Ledger accounts and cost centres, the payroll journal drafted for every approved run, allocation by cost centre and timesheet line, accruals with their reversals, reconciliation of clearing and liability accounts, and the period lock.
Approval conditions
At year-end the YearEndStatement and EmployeeTaxCertificates are produced from the year's payslips, Finance Controller approves the statement (Status: Prepared → PendingApproval → Approved), employee certificates link their ApprovalStatement before PublishedOn is set, and Finance Controller locks the TaxYear (Status: Open → Locked), and posting into it requires reopening by a named role.
HR Manager approves it (Status: PendingApproval → Active).
PendingApproval
- PR-62471 LE-85716 30 in 8 d
- PR-19455 LE-63938 35 in 9 d
- PR-22110 LE-22800 18 in 4 d
- PR-88915 LE-43527 27 4 d
- PR-33121 LE-69431 36 8 d
PR-62471
- LegalEntity
- LE-85716
- RunType
- Regular
- PeriodEnd
- 25 Sep
- PayDate
- 27 Sep
- Headcount
- 30
Approval conditions.
Accounts and cost centres
The ledger accounts payroll needs are a short list. Expense: salary, allowance, overtime, employer contribution, benefit, severance. Liability: withholding payable, social insurance payable, pension payable, benefit provider payable, garnishment payable. Plus loan receivable and net pay clearing. Each pay component names its expense account and its liability account, so the mapping is decided once per component and applies to every run; the entity names its clearing account. Cost centres are per entity; every employee has one on their assignment, and a timesheet line can charge a day’s hours elsewhere.
Approval conditions
Finance Controller reviews it in Journals to Post and posts it (Status: Draft → Posted);
Draft
- PJ-83486 PR-27449 9 d
- PJ-66337 PR-61695 13 d
- PJ-88712 PR-30382 3 d
- PJ-16809 PR-99083 3 d
- PJ-82441 PR-70760 12 d
PJ-83486
- JournalType
- PayRun
- PayRun
- PR-27449
- LegalEntity
- LE-43839
- PostingDate
- 08 Sep
- TotalDebit
- 870
Posting waits for the finance controller.
The payroll journal
An approved run drafts its journal for Finance Controller review; posting the journal marks the run Posted:
| Component type | Debit | Credit |
|---|---|---|
| Earning | The component’s expense account, by the employee’s cost centre | Net pay clearing |
| Employee statutory deduction | Net pay clearing | The component’s liability account, for the authority |
| Employer contribution | The component’s expense account, by cost centre | The component’s liability account, for the authority |
| Benefit premium, employee share | Net pay clearing | Benefit provider payable |
| Benefit premium, employer share | Benefit expense, by cost centre | Benefit provider payable |
| Loan instalment | Net pay clearing | Loan receivable |
| Garnishment | Net pay clearing | Garnishment payable |
| Reimbursement | The component’s expense account | Net pay clearing |
| Terminal benefit | Severance expense, by cost centre | Net pay clearing |
The journal records the run’s full net obligation, including held payslips. Confirmed payments reduce clearing against the bank, whether confirmation occurs before or after journal posting. The remaining balance is the unpaid obligation. The controller reviews the draft in Journals to Post against the register and posts it. A reversal posts a mirror journal that names the journal it reverses, and leaves both.
StatusPendingPreparedPendingApprovalApprovedFiledRejectednext 45 days
Allocation
Expense lines are split by the employee’s cost centre. Where an approved timesheet charged days to another cost centre, the hourly components are split in proportion to the hours on those timesheet lines. The Payroll Cost by Cost Centre report shows the result by entity, cost centre, component and month. Its total ties to the journal for the month because it is built from the same lines. Liability and clearing lines carry no cost centre.
Approval conditions
At year-end the YearEndStatement and EmployeeTaxCertificates are produced from the year's payslips, Finance Controller approves the statement (Status: Prepared → PendingApproval → Approved), employee certificates link their ApprovalStatement before PublishedOn is set, and Finance Controller locks the TaxYear (Status: Open → Locked), and posting into it requires reopening by a named role.
Finance Controller reviews it in Journals to Post and posts it (Status: Draft → Posted);
Payroll Officer runs the calculation (Status: InputsLocked → Calculated).
Payroll Officer submits the run (Status: Calculated → PendingApproval).
StatusDraftInputsLockedCalculatedPendingApprovalApprovedPosted
| Pay Run Number | Legal Entity | Pay Calendar | Pay Period | Run Type |
|---|---|---|---|---|
| PR-80607 | LE-41929 | PC-8258 | PP-10416 | Regular |
| PR-62914 | LE-56964 | PC-7164 | PP-98417 | OffCycle |
| PR-79369 | LE-53781 | PC-4633 | PP-48246 | Bonus |
| PR-38822 | LE-24818 | PC-5174 | PP-53519 | FinalSettlement |
| PR-37094 | LE-74136 | PC-3625 | PP-86388 | Arrears |
| PR-34638 | LE-49049 | PC-8181 | PP-36724 | Regular |
Accruals
A period that ends before the pay date, or a bi-weekly calendar that straddles the month, leaves earned pay unposted at month-end. The module drafts an accrual journal for the days earned and not yet paid, from the active compensation records and the attendance to date. Its reversal is a journal of its own, dated the first of the next month. Leave liability is accrued from the Leave Liability report, which values unused balances at each employee’s daily rate.
Approval conditions
Finance Controller, different from both run preparer and approver, authorises it from Payment Batches to Authorise (Status: Authorised);
Generated
| Batch Number | Pay Run | Legal Entity | File Format | Payment Count |
|---|---|---|---|---|
| PB-87808 | PR-56899 | LE-42651 | SEPA | 21 |
| PB-92319 | PR-23081 | LE-52439 | NACHA | 13 |
| PB-65359 | PR-17125 | LE-40399 | BACS | 3 |
| PB-70657 | PR-82838 | LE-47494 | NEFT | 24 |
| PB-68313 | PR-71004 | LE-14808 | Generic | 2 |
| PB-93001 | PR-19155 | LE-42961 | SEPA | 12 |
Reconciliation
Three reconciliations close the payroll month:
- Net pay clearing to bank. Clearing equals remaining released and held obligations after confirmed payments counted once. A confirmed batch can leave a balance for other held or returned amounts; Payment Reconciliation identifies them. Zero is expected only when the full obligation is settled.
- Statutory liabilities to filings. Each authority’s payable should equal the filings prepared and not yet paid. The Statutory Liability Summary shows the balance by authority and period.
- Expense to register. Gross plus employer contributions on the register should equal the expense lines on the journal, by cost centre.
Differences are explained by a specific payslip or input, because the journal lines carry the component and the run.
Period close checklist
- Review and approve regular and off-cycle runs.
- Generate batches from released amounts and obtain independent payment authorisation.
- Record bank confirmations and returns per payment.
- Review and post journals for the full payroll obligations.
- Prepare the required filings.
- Draft and review the accrual and its reversal.
- Reconcile register, clearing and liabilities; record the disposition of unpaid amounts.
- Finance Controller closes the pay period.
Approvals, payment confirmations and journal posting retain their owners and dates on the relevant records. A closed period refuses new runs; corrections use an eligible open period.
Modules
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Core HR
The employee record, assignments and the org chart, documents with verification and expiry, tax details, salary structures, onboarding checklists and exits.
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Recruiting
Requisitions against approved positions, candidates through stages, interviews with feedback, and offers approved against the band before they are sent.
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Leave & attendance
Leave policies and balances, requests and approval, work patterns, shifts and rosters, daily attendance from devices, and the timesheets with a line per day that payroll reads at cutoff.
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Payroll
Pay components, calendars and periods, inputs from attendance and benefits, gross-to-net calculation under statutory rules and the employee's tax details, review, approval, payslips, the bank file and the payment behind each payslip.
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Benefits
Plans with premiums and employer contributions, eligibility and enrolment windows, coverage levels, dependants and nominees, and the deductions payroll takes from them.
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Compliance
Statutory rules and their bands as effective-dated data, monthly and year-end returns built from posted pay runs, employee tax statements, the tax year lock, policy acknowledgement and the documents that expire.
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Payroll accounting
Ledger accounts and cost centres, the payroll journal drafted for every approved run, allocation by cost centre and timesheet line, accruals with their reversals, reconciliation of clearing and liability accounts, and the period lock.
Reports
All reportsPayroll Register
Every payslip in a run with days paid, gross, each deduction, employer contributions and net; the document the approver signs off.
Payroll Summary by Component
Totals per component by entity and run, employee and employer sides, the sheet the register is reconciled to before the run is submitted.
Statutory Liability Summary
Withholding, social insurance and pension amounts by entity, jurisdiction and period, with what has been filed, paid and is still owed.
Payroll Cost by Cost Centre
Employer cost by entity, cost centre, component and month, reconciled to the posted payroll journal.
Roles and permissions
Owns the employee master, assignments, positions, policies, offers and exits, and decides leave exceptions and compensation revisions.
Prepares the pay run: employee pay setup, inputs, calculation, review, payslips, bank file and statutory returns.
Approves the pay run, authorises the bank file, owns the payroll journal and its reconciliation to the ledger, and locks periods and tax years.
Sees their own record, payslips and balances; raises leave and timesheets; keeps their documents, tax details and dependants current; records feedback on interviews they conduct.
Related processes
Pay run
Inputs, calculation, payroll approval, payment authorisation and posting, with held amounts reconciled separately.
8 stages · 3 approvals
Hire to pay
From offer approval to the first payslip, with verified bank details, salary approval and separate payment authorisation.
8 stages · 7 approvals
Exit to final settlement
Notice, documented terminal amounts, clearance, final payroll approval and separate payment authorisation before closure.
7 stages · 5 approvals