Accounting Dictionary

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Payroll Expense

Definition: Payroll expense is the amount of salaries and wages paid to employees in exchange for services rendered by them to the business. The term may also be assumed to include the cost of all related payroll taxes.

In a cash basis company, payroll expense is the cash paid during an accounting period for salaries and wages. In an accrual basis company, payroll expense is the amount of salaries and wages earned by employees during the period, whether or not they were paid during that period.