What are wages payable on a balance sheet?
Emma Miller
Updated on January 04, 2026
Wages payable refers to the wages that a company’s employees have earned, but have not yet been paid. Under the accrual method of accounting, this amount is likely recorded with an adjusting entry at the end of the accounting period so that the company’s balance sheet will include the amount as a current liability.
Are wages part of accounts payable?
A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account. Thus, unpaid salaries are included in the calculation of the company’s working capital.
Is wages payable gross or net?
For example, when you tell an employee, “I’ll pay you $50,000 a year,” it means you will pay them $50,000 in gross wages. Net pay is the amount of money your employees take home after all deductions have been taken out. This is the money they have in their pocket on payday.
Are wages payable expenses?
Wages are the hourly compensation earned by temporary employees whilst wages payable is the number of wages earned by employees but not yet received by them. Wages relate to profit and loss statement whilst the other one relates to the balance sheet. Wages are an expense whilst wages payable is a liability.
Is salaries and wages payable an asset?
Salary payable is a current liability account containing all the balance or unpaid wages at the end of the accounting period. The amount of salary payable is reported in the balance sheet at the end of the month or year, and it is not reported in the income statement.
Are wages payable current liabilities?
A current liability account that reports the amounts owed to employees for hours worked but not yet paid as of the date of the balance sheet.
Is Accounts Payable a debit or credit entry?
As a liability account, Accounts Payable is expected to have a credit balance. Hence, a credit entry will increase the balance in Accounts Payable and a debit entry will decrease the balance. When a company pays a vendor, it will reduce Accounts Payable with a debit amount.
