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Global Work Glossary

Lost in a maze of global employment jargon? Find your way out with our handy collection of work and HR terminology

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Accrued payroll

What is accrued payroll?

Accrued payroll is the unpaid wages and benefits that employees have earned over a certain period. And when companies track these figures, this is referred to as payroll accrual. Essentially, accrued payroll is a liability on a company’s balance sheet until the actual payments are made.

For instance, a company with a bi-weekly pay schedule would know the wages and benefits employees had earned for the two weeks worked, but not yet have processed them. This would then amount to accrued payroll that the company would keep track of.

Oftentimes accrued payroll will come in the form of payments to independent contractors who aren’t paid in the same way as employees. It can also come from uncashed paycheques, unused vacation days, or any outstanding employee reimbursements.

It’s essential for employers to track accrued payroll in order to stay on top of payments, ensuring compliance and employee satisfaction. Managing accrued payroll also helps companies manage their budgets and expenses more effectively.

To do so, businesses need to establish well-defined processes and keep meticulous records of employee hours, wages, benefits, and other forms of compensation. HR software such as Multiplier makes this easy, providing a centralized location for all important data, making automatic pay calculations, and flagging accrued payroll on a regular basis.

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