The accounting treatment for salaried and hourly employees is similar, but there are practical differences in how you record them — especially if you want to track labor costs separately in your general ledger.
Salaried employees
Salaried payroll is predictable — the same gross amount every pay period. Most businesses use a single Salaries Expense account. The journal entry is straightforward:
| Account | Debit | Credit |
|---|---|---|
| Salaries Expense | $8,000.00 | |
| Federal WH Payable | $1,200.00 | |
| FICA Payable | $612.00 | |
| State WH Payable | $240.00 | |
| Net Wages Payable | $5,948.00 |
Hourly employees
Hourly payroll varies each period based on hours worked. You may want separate accounts for regular hours vs. overtime:
| Account | Debit | Credit |
|---|---|---|
| Hourly Wages Expense | $4,800.00 | |
| Overtime Wages Expense | $720.00 | |
| Federal WH Payable | $832.50 | |
| FICA Payable | $421.20 | |
| State WH Payable | $165.00 | |
| Net Wages Payable | $4,101.30 |
Do you need separate accounts?
If you have both salaried and hourly employees, separate expense accounts give you better visibility into your labor cost mix. Most small businesses start with a single Wages & Salaries Expense account and split later when reporting needs it.
PostBooks maps payroll line items to whatever expense accounts you configure — one account or many. Try it free.