Payroll Journal Entry Calculator
Turn a payroll run into a balanced journal entry: wage expense, employer tax expense, each withholding liability, net pay, and a debit-credit check.
Payroll Journal Entry Calculator
Wages and employee withholding
Total gross pay for the period, before any withholding. Include overtime, bonuses, and commissions.
State and local income tax withheld from the paychecks. Enter 0 for a no-income-tax state.
Employee share: 6.2% of Social Security wages up to the annual wage base, plus 1.45% of all Medicare wages and the 0.9% Additional Medicare Tax above the filing-status threshold.
Employee-paid health premiums, 401(k) deferrals, garnishments, union dues. All post to one Employee Deductions Payable line.
Employer payroll taxes
Prefilled to match the employee amount. Override if the worker crossed the Social Security wage base mid-period.
Prefilled to match the employee amount. Override if the employee figure includes the 0.9% Additional Medicare Tax (employers do not match that).
FUTA is commonly 0.6% of the first $7,000 of each employee's wages after the state credit. SUTA rate and wage base vary by state and by your experience rating.
Account labels
Label only, with no effect on the math. Paid now credits Cash, accrued credits Salaries Payable.
Pick whichever name your chart of accounts uses.
Journal entry
Enter your payroll totals to build the entry.
| Account | Debit | Credit |
|---|
Zero-amount lines are hidden.
No employer taxes entered, so there is no second entry.
Employers normally match employee Social Security and Medicare. Leaving these at zero understates payroll tax expense.
Net pay is zero for this period.
How a payroll journal entry is built
A payroll journal entry starts at the payroll register and ends in the general ledger. The register gives you gross wages, each withholding, and the employer taxes. The entry turns those totals into debits and credits.
Gross wages are the debit, not net pay. That is the mistake most people make the first time. The full amount earned is the cost of the labor, so the whole gross figure is charged to Wage Expense (or Salaries Expense, if that is what your chart of accounts calls it). Every dollar withheld from a paycheck is money the employer is holding for someone else (the IRS, the state, an insurance carrier), so each withholding becomes a credit to a liability account. What is left is net pay, and it is credited to Cash.
Using this page's default numbers, a $5,000 payroll run looks like this:
- Debit Wage Expense $5,000.00
- Credit Federal Income Tax Payable $550.00
- Credit State Income Tax Payable $180.00
- Credit FICA Tax Payable, Social Security (employee) $310.00
- Credit FICA Tax Payable, Medicare (employee) $72.50
- Credit Employee Deductions Payable $150.00
- Credit Cash $3,737.50
Withholding adds to $1,262.50, so net pay is $5,000.00 minus $1,262.50, or $3,737.50. Debits and credits both total $5,000.00. Net pay is the residual, and that is what makes the entry tie: the calculator subtracts rather than recomputing net pay a second way, so a cent can never go missing. If your gross, withholding, and employer totals come from a multi-employee run, the Multi-Employee Payroll Calculator is the step before this one.
Employer payroll taxes in the second entry
The employer share is new money, not a reclassification of what you withheld. The employee's $310.00 of Social Security is already sitting in a payable account. The employer owes another $310.00 on top of it, and that second amount is a fresh expense.
The employer matches 6.2% for Social Security up to the annual wage base and 1.45% for Medicare with no cap. The employer does not match the 0.9% Additional Medicare Tax, which comes out of the employee paycheck only, so on a high earner the employer Medicare figure is smaller than the amount withheld. That is why the two employer FICA fields on this page are prefilled but editable. FUTA runs 6.0% on the first $7,000 of each employee's wages, dropping to 0.6% after the standard 5.4% state credit. SUTA is whatever rate your state assigns against its own wage base, so the two unemployment figures come from your rate notice, or from the SUTA and FUTA Employer Tax Calculator.
With the defaults, Entry 2 debits Payroll Tax Expense $547.50 and credits FICA Tax Payable $310.00 and $72.50, FUTA Payable $30.00, and SUTA Payable $135.00. This is the entry that reconciles to Form 941 for FICA and federal withholding, and to Form 940 for FUTA. Viewed as cost rather than as ledger accounts, the same employer lines are what the Employer Cost of an Employee Calculator totals up.
Cash, payroll payable, or accrued wages
Three situations get conflated here:
- You record payroll on the day the money leaves the bank. Credit Cash for net pay. One entry, done.
- You record payroll before the money moves. Credit Salaries Payable (or Payroll Payable) for net pay, then post a second entry on payday debiting Salaries Payable and crediting Cash. The liability clears itself.
- A pay period straddles month-end. Wages earned in one month and paid in the next need an accrual at the cut-off and usually a reversing entry in the following period. That is a different calculation, based on days worked rather than on a completed payroll run.
The toggle on this page covers the first two, and it changes the account label on the net-pay credit line and nothing else. Totals, subtotals, and the balance check are identical either way. It does not prorate anything or generate a reversing entry.
Checking the entry before you post it
Before the entry goes in, run four checks: debits equal credits to the cent, net pay matches the total of the paychecks you actually issued, each liability balance matches what you will deposit or remit, and the Payroll Tax Expense debit equals the sum of the employer liability credits underneath it.
The failure a downloaded spreadsheet will not catch is withholding that adds up to more than gross wages. A broken formula happily prints a negative Cash credit and a template will not complain. This page stops instead and tells you which two figures disagree. When it happens, the usual causes are a withholding column pasted from the wrong pay period, a garnishment entered twice, or gross wages keyed as net.
The cleanest fix is to get the totals right upstream. Run the payroll in the WorkLogs44 app first: it produces the per-employee gross, the withholding split, and the employer-side FICA, FUTA, and SUTA figures, the same set of numbers this page turns into a balanced entry.
Frequently Asked Questions
Common questions about payroll journal entry calculator
What is the journal entry for payroll?
Debit Wage Expense for total gross wages. Credit a separate liability account for each employee withholding (federal income tax payable, state income tax payable, FICA payable for Social Security and Medicare, and employee deductions payable), then credit Cash (or Salaries Payable) for net pay. A second entry debits Payroll Tax Expense for the employer share and credits FICA payable, FUTA payable, and SUTA payable. Total debits always equal total credits.
Is employer payroll tax an expense or a liability?
Both, at different moments. When you record payroll, the employer share of Social Security, Medicare, FUTA, and SUTA is an expense (debit Payroll Tax Expense, which hits the income statement) and at the same time a liability (credit the payable accounts, which sit on the balance sheet until you deposit the money). When you make the tax deposit, you debit the payable accounts and credit Cash, clearing the liability.
How do you record net pay in a journal entry?
Net pay is a credit, not a debit. Credit Cash for net pay if the money leaves your bank in the same entry. If you record payroll before the money moves, credit Salaries Payable (or Payroll Payable) instead, then post a second entry debiting Salaries Payable and crediting Cash on payday. Net pay is always gross wages minus every employee withholding and deduction. It is the leftover, and it is the line that makes the entry balance.
What accounts does a payroll entry hit?
Two expense accounts (Wage or Salaries Expense, and Payroll Tax Expense), the employee withholding liabilities (Federal Income Tax Payable, State Income Tax Payable, FICA Tax Payable, Employee Deductions Payable), the employer tax liabilities (FICA Tax Payable, FUTA Payable, SUTA Payable), and either Cash or Salaries Payable for net pay.
Should employer payroll taxes be a separate journal entry?
Most bookkeepers keep them separate, and it makes reconciliation easier: the wage entry ties to the payroll register, the employer entry ties to your tax deposits and Form 941. It is not required, though. A single combined entry with all the debits and all the credits is equally correct as long as it balances. This calculator shows both sections so you can post it either way.
Does the employer match all of the employee's Medicare withholding?
No. The employer matches the 1.45% Medicare tax, but not the 0.9% Additional Medicare Tax that applies to wages above $200,000 (single or head of household), $250,000 (married filing jointly), or $125,000 (married filing separately). That surtax is employee-only. If your employee crossed a threshold, the employer Medicare figure will be lower than the amount withheld, which is why this tool lets you override the prefilled match.
Why is Social Security withheld sometimes less than 6.2% of gross wages?
Social Security stops once an employee reaches the annual wage base, which is $184,500 for 2026, up from $176,100 for 2025. In the pay period where an employee crosses that ceiling, only part of the wages are taxed, so the withheld amount is less than 6.2% of gross. Medicare has no wage cap.
How do I know my payroll journal entry is balanced?
Add the debit column and the credit column separately. They must be identical to the cent. In a payroll entry the debits are gross wages plus employer payroll tax expense, and the credits are every withholding liability plus every employer tax liability plus net pay. This calculator ties the two totals on every keystroke and flags an entry it cannot balance, such as withholding that adds up to more than gross wages.