USA Journal Entry help

[Heather Robinson]

I have come across an issue where the accrued payroll is wrong. It changes from year to year so I am not sure how to make a journal entry so it is correct.

 

[kirby]

Payroll accrual is needed where you have a biweekly (paid every two weeks) payroll. Reason is that the last biweekly payroll period usually does not end perfectly on the last day of the year. So an accrual is needed for any days in the year NOT covered by the last payroll period. To estimate that, take the amount of the last payroll paid during the year. Divide that by number of days covered by that payroll to get a daily amount. Then multiply that daily amount times the number of days NOT covered by the last payroll period. Accrue that amount and don't forget to reverse that accrual when you pay the next payroll.

 

[Fidget]

Is a biweekly payroll a common thing in the U.S? Here it's calendar month, 4 weekly, or to a lesser extent, weekly. I don't think anywhere here does biweekly.

 

[kirby]

Common in U.S.