Payroll accrual

A payroll accrual recognizes compensation for employee service received through the reporting date but not yet paid. The service cutoff determines the expense period. The pay date determines when the related payable is settled.

Reconcile service to the payroll register

Identify the last paid workday and the unpaid service days or hours through period end. Reconcile employees, approved time, pay rates, salary allocations, and any supplied employer costs. The file should show gross compensation before withholdings and the separate liabilities created by amounts withheld.

Cedar Trail's bounded schedule supplies $92,000 of earned gross payroll and $7,200 of in-scope employer costs. The December accrual is $99,200 before any qualifying leave amount:

$92,000 earned gross payroll + $7,200 employer costs = $99,200

Withholdings divide the credited obligations among employees and third parties. They do not reduce the employer's gross compensation expense. The January cash entries settle the supported liabilities; they do not create January expense for December service.

Keep different compensation obligations separate

Ordinary earned wages, employer payroll costs, bonuses, deferred compensation, share-based compensation, severance, pensions, and compensated absences can use different recognition and measurement guidance. A single payroll system may hold data for several models. Separate the populations before computing the close.

The employee portal also does not prove a leave liability. Plan terms, past practice, service attribution, vesting or accumulation, forfeiture, probable payment, and measurement must support that conclusion.

Follow the authority and learning path

Topic 710 does not provide a standalone rule for the ordinary wage example. ASC 710-10-25-1 supports the separate compensated-absence analysis used in the connected task. It requires past service, vesting or accumulation, probable payment, and a reasonable estimate. The task supplies those conclusions for vacation and does not export them to sick leave.

The routine-liability lesson develops the cutoff. Its Cedar Trail close shows the complete schedule. The payroll-and-leave task checks the bounded sum while keeping missing plan facts as a stop condition.

Boundaries

This page treats tax rates, benefit scope, service records, and amounts as supplied inputs. Actual payroll work requires current federal, state, local, and contract terms. The accounting calculation is not tax or employment-law advice.