How to Create a General Ledger for Payroll

by Kirk Thomason; Updated September 26, 2017

A payroll ledger contains information relating to the wages and salaries paid to employees. The information is often for a single accounting period. Companies will need to create a specific general ledger for payroll information. Another name for this ledger may be a payroll journal. The journal can hold more information than a traditional ledger. Each account holds information relating to wages, salaries, benefits, payroll taxes and other information. Companies typically need to set up expense and liability accounts.

Step 1

Create payroll controlling accounts. These are top-level general ledger accounts that control each account underneath it. A controlling account number may be 200500 for payables and 600500 for expenses.

Step 2

Use different account numbers for wages and salaries. Wages accounts should hold information for employees paid hourly. Salaries accounts should be specifically for fixed labor costs. Account number should start at 200501 and 600501 (payables and expense), continuing in this fashion for each account needed.

Step 3

List each payroll tax separately on the general ledger. Payroll taxes include federal, state, Social Security, Medicare and unemployment. Create an expense account for the employer portion and a corresponding payables account for each tax.

Step 4

Record payroll entries on an accrual basis. For example, prepare payroll at the end of each two week payroll period. Post the information into the corresponding expense and payable accounts.

Step 5

Restrict payroll ledger access to senior accountants. These individuals should be the only ones that have access to the ledger for making changes.


  • "Accounting"; Charles T. Horngren, et al.; 2007

About the Author

Kirk Thomason began writing in 2011. In addition to years of corporate accounting experience, he teaches online accounting courses for two universities. Thomason holds a Bachelor and Master of Science in accounting.