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Chapter
Payroll accounting
Chapter Three: Payroll accounting
Three

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Introduction
LANGUAGE EDITING
Payroll accounting is a process that requires a comprehensive of the principles and
methods used in employee remuneration and deductions. In this chapter, you will
LANGUAGE EDITING
learn meaning, forms and methods of employees’ remuneration and deductions.
Also, you will learn to prepare and maintain accounting records related to payroll.
The competencies developed will enable you to demonstrate understanding of the
concepts and principles applied in the accounting of payroll and preparing as well
as maintaining accounting records related to payroll.

taxes payable, deductions and contributions
Company without payroll
to benefit schemes. It is essentially the
calculation, management, recording, and
Concept of payroll analysis of employee’s remuneration.
accounting Business entities have to maintain records
One of the duties of accounting department of employees’ benefits such as salaries and
in any entity includes calculation of the wages, and be able to pay regularly as per
accurate amount payable to each employee entity’s policies. Amounts payable to part
at the right time. The accounting process time employees based on a piece of work
used to calculate the amount payable to or on hourly rate are called wages while
employees is known as payroll accounting. the amounts payable monthly to permanent
Payroll accounting is a process of managing employees are known as salaries. Wage is
and recording financial transaction related paid daily or weekly while salary is paid
to employee’s remuneration for their at the end of every month.
work done. Payroll accounting includes The preparation and dissemination of
calculation of salaries, wages, bonuses, payroll information enable; employees
allowances, compulsory deductions and to understand the matter concerning with
other deductions, as well as producing their earnings and deductions; enable
payroll report by following the required the management to utilise information
government regulations. These expenses obtained in the payroll in planning and
include individual employee’s remuneration, controlling decision processes; and enable

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