Earned Wages

Earned wages refers to accrued payroll. At the end of the accounting cycle, many businesses have not actually paid their employees for the time worked since the prior payroll. This can sometimes have a significant dollar value impact on the balance sheet associated with these unpaid earnings.

Accrued Payroll – An Explanation

Accrued Payroll

Accrued payroll is a current liability comprised of four sections.  The first is the amount of payroll earned by staff and not yet processed or paid.  The second is the dollar value of personal time off accumulated for each employee aggregated into one number.  The third consists of payroll taxes owed to the respective governmental authorities and the final section comprises the accumulated benefits payable such as health insurance, retirement contributions, and amounts owed to third parties as deductions from the gross payroll.

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