Payroll Accounting Meaning | Free Cost Accounting Articles

Payroll Accounting Meaning

Payroll Accounting Meaning
Payroll Accounting Meaning


Payroll accounting is the part of accounting that relates to the computation of gross wages and deduction from gross wages for the purpose of wages paid to each employee. Periodic Statement of Pay Roll and Payslip shows gross wages earned by the worker, deductions from gross wages, and net wages payable to each worker or employee.


Following deductions are allowed as per the Payment of Wages Act 1963:

  1. Penalty for absence from duty
  2. Absence from duty
  3. Deduction for damage
  4. House Rent
  5. Cost of amenities andServices
  6. Recoveryof advance
  7. Income Tax
  8. P.F. amount
  9. Insurance Premiums
  10. ESI, etc.

Pay Slip

It is a statement that is prepared for each worker individually. It shows gross deductions from gross wages and net wages payable.

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