Expenses & income · Level: Basics
Journal entry: Paying wages without deductions
For casual staff without deductions, the amount paid equals the wage expense: the simple case before full payroll.
Worked example
Wages of £17,900.00 are paid by bank transfer.
Correct journal entry
Wages and salaries £17,900.00 / Bank £17,900.00
Debit
Wages and salaries£17,900.00
Credit
Bank£17,900.00
Why?
- Wages and salaries: expense incurred → debit
- Bank: asset decreases → credit
Typical mistake
Crediting wages: expenses are always debits.
Your turn
Three problems on exactly this case, with different numbers. Amounts work with or without separators, e.g. 2,400.00 or 2400.
Transaction
We pay this month's casual wages of £21,600.00 by bank transfer (no deductions).
Debit
Assets up · expenses · liabilities down
Total debit£0.00
Credit
Liabilities up · income · assets down
Total credit£0.00
Frequently asked questions
What is the journal entry for paying wages without deductions?
Example: Wages and salaries £17,900.00 / Bank £17,900.00.
How do I recognise this case?
For casual staff without deductions, the amount paid equals the wage expense: the simple case before full payroll.
What is the typical mistake?
Crediting wages: expenses are always debits.