If you're new to payroll bookkeeping, understanding the general ledger (GL) is foundational. Every payroll journal entry you post ends up here — and if the entries are wrong, every financial report built from the GL will be wrong too.
What is the general ledger?
The general ledger is the master record of all financial transactions in a business. Every journal entry — payroll, expenses, sales, depreciation — gets recorded in the GL. It's organized by account, so you can see the full history of every account over time.
GL vs. chart of accounts
- Chart of accounts: The list of all accounts (Wages Expense, FICA Payable, etc.)
- General ledger: The running record of every transaction posted to each account
The chart of accounts is the structure; the GL is the data.
How payroll affects the general ledger
Every pay run creates journal entries that post to multiple GL accounts:
- Wages Expense increases (debit) with each pay run → shows up on your P&L
- Payroll liability accounts increase (credit) with each pay run → shows up on your balance sheet
- Payroll liability accounts decrease (debit) when tax deposits and benefit payments are made
- Cash decreases (credit) when employees are paid and when taxes are remitted
How to review payroll in the GL
In QBO: Reports > Account History for each payroll account. In Xero: Accounting > Reports > General Ledger. Filter by date range and account to see each pay run's entries side by side.
What a clean payroll GL looks like
Each payroll liability account should show debits (payments) that clear the credits (accruals) within a few weeks. If a liability balance grows unbounded, it means payments aren't being recorded.
PostBooks generates clean, balanced journal entries that keep your GL accurate every pay run. Start free.