Should I accrue payroll taxes too?

Yes, if it is material. The employer's share of Social Security, Medicare and unemployment tax on the accrued wages is a cost of the same month. Many small companies accrue gross wages only and accept the difference as immaterial.

Workdays or calendar days?

Workdays is the common basis for salaried staff paid on a fixed schedule; calendar days is acceptable if applied consistently. What matters is that the accrual can be recomputed from the payroll calendar.

Journal entry for accrued wages

At month-end, debit Wages and salaries and credit Accrued wages for the days worked since the last payday. On payday, reverse the accrual or debit Accrued wages for the part of the payroll it covers.

Bi-weekly gross: $28,000
Workdays in March: 3 of 10
Accrued wages: $8,400
Entity: Illustrative company
Basis: Accrual
Currency: USD
Period: March – April 2026

The worked example

Salaried staff earn $28,000 per 10-workday pay period. The period running into April has 3 workdays in March, so $8,400 of it is March's cost, accrued at month-end and reversed on April 1 before the payroll posts.

Adjusting entry · March 31, 2026

JE-131 Mar 2026Adjustingposted

Accrue the March workdays of the open pay period.

Journal entry JE-1, 2 lines
Account	Debit	Credit
6000 Wages and salaries	8,400 US Dollar
2110 Accrued wages		8,400 US Dollar

Totals	8,400 US Dollar	8,400 US Dollar

Balanced.

Reversed by JE-2

Reversing entry · April 1, 2026

JE-21 Apr 2026Adjustingposted

Reverse the accrual.

Journal entry JE-2, 2 lines
Account	Debit	Credit
2110 Accrued wages	8,400 US Dollar
6000 Wages and salaries		8,400 US Dollar

Totals	8,400 US Dollar	8,400 US Dollar

Balanced.

Reverses JE-1

What the entries do to the accounts

Every entry above posted to the ledger, starting from zero balances: the net debit or credit each account is left with. Debits equal credits, so the books still balance.

Net movement by account
Account	Debit	Credit

Totals	0 US Dollar	0 US Dollar

2 accounts net to zero across the entries and are not shown.

Why it is booked this way

Payroll runs on its own calendar. When a pay period straddles the month-end, the days already worked are a cost of the month being closed and a liability on its balance sheet, even though payday is next month.

Prorating by workdays ties the accrual to the payroll calendar, so anyone can recompute it from the dates and the gross.

Common mistakes

Expensing payroll only on paydays, so a month with three paydays looks half again as expensive as a month with two.
Accruing the full next payroll instead of the days that fall in the month being closed.

Questions

Should I accrue payroll taxes too?: Yes, if it is material. The employer's share of Social Security, Medicare and unemployment tax on the accrued wages is a cost of the same month. Many small companies accrue gross wages only and accept the difference as immaterial.
Workdays or calendar days?: Workdays is the common basis for salaried staff paid on a fixed schedule; calendar days is acceptable if applied consistently. What matters is that the accrual can be recomputed from the payroll calendar.

Terms on this page

Work with this entry

The tool that computes the schedule, the concept behind it, the entries that come next and the components that render them.

An illustrative company, not anyone’s real books. Every figure on this page is computed from the inputs in the example and posted by the same functions as the journal entry balancer. General information for US companies under US GAAP, not accounting or tax advice.