Journal Entry for Salary Expenses

Journal Entry for Salary Expenses

In this article we would explain the journal entry for salary expense or payroll expenses. Salary is one of the most important expenses for every business. The following journal entry is recorded for salary expenses

Date	Particular	Ledger Folio	Dr.	Cr.
01-01-2017	Salary		xxx
01-01-2017	Cash			xxx

Salary being or increase in expense is debited and other aspect is credit. There are three possible ways in which the salary expense transaction may occur

1.    Salary paid in cash.

2.    Salary paid through Cash.

3.    Salary is not paid.

It is important to remember that salary is an expense and following debit & credit rules would apply during the recording of journal entry for salary. Usually the first rule for recording the journal entry is applied. However, the second rule is mostly relevant to correct the wrongly recorded transaction.

·         Increase in expense is debit. (Usually applicable).

·         Decrease in expense.

Journal Entry for Salary paid in Cash

Salary shall be debit and cash shall be credit.

Date	Particular	Ledger Folio	Dr.	Cr.
01-01-2017	Salary		xxx
01-01-2017	Cash			xxx

Journal Entry for Salary paid through bank

Salary shall be debit and bank shall be credit.

Date	Particular	Ledger Folio	Dr.	Cr.
01-01-2017	Salary		xxx
01-01-2017	Cash			xxx

Journal Entry for Salary paid through bank

Salary shall be debit and salary payable shall be credit.

Date	Particular	Ledger Folio	Dr.	Cr.
01-01-2017	Salary		xxx
01-01-2017	Salary payable			xxx

We observed that in all three transactions the salary head was debited. Thus beginner to accounting may remember that expense is debit (expense usually debit).