HR, Payroll & Staffing Knowledge Center
Explore our verified library of HR, Payroll & Staffing transactions. Every entry is reviewed for IFRS compliance and real-world accuracy by our technical accounting team.
Temporary Staffing Revenue — Gross Recognition (Firm is Principal, Bears Employment Risk)
Recording temporary staffing revenue on a gross basis — the staffing firm bills the client at the bill rate and separately records the temp worker's wages as cost of services, because the firm is the employer of record bearing all employment risks.
Permanent Placement — Contingency Search Fee (No Fee If No Hire)
Recognizing permanent placement fee revenue only when a candidate is hired and starts employment — with the variable consideration constraint reflecting the replacement guarantee period.
Retained Executive Search — Upfront Retainer and Completion Fee (Multiple Milestones)
Recognizing retained executive search revenue across three milestone tranches — retainer at engagement, progress payment, and completion payment — each tied to a distinct performance obligation.
Managed Service Provider (MSP) — Program Management Fee Revenue
Recording MSP revenue — where a staffing firm manages all of an enterprise client's contingent workforce spend across multiple staffing suppliers, earning a percentage of total managed spend.
Recruitment Process Outsourcing (RPO) — Per-Hire Fee and Monthly Subscription Revenue
Recognizing RPO revenue — where a firm takes over an enterprise's recruiting function, earning a monthly management fee plus a per-hire fee for each position successfully filled.
Professional Employer Organization (PEO) — Gross vs. Net Revenue Determination
Analyzing PEO revenue recognition — determining whether the PEO recognizes gross billing (full client payroll + service fee) or net service fee only, based on whether the PEO is the principal employer bearing actual employment risks.
Contract-to-Hire Conversion Fee — Revenue When Temp Worker Converts to Direct Employee
Recognizing a conversion fee when a client directly hires a temporary worker the staffing firm had placed — the contractual fee for converting from the staffing relationship to a direct hire.
Workers' Compensation Self-Insurance — Actuarial Reserve for Open Claims
Establishing and maintaining an actuarial reserve for workers' compensation claims on a self-insured program — the most significant liability management item for large staffing companies.
State Unemployment Insurance (SUI) — Experience Rating and Rate Management for Staffing
Accruing state unemployment insurance taxes on temporary worker wages — with the unique experience rating dynamics of staffing companies, who face among the highest SUI rates due to the inherent high turnover of the temporary workforce.
ACA Employer Mandate — Health Insurance for Temps Working 30+ Hours (Staffing Firms)
Accruing health insurance cost and potential ACA penalty exposure for temporary workers averaging 30 or more hours per week — the most significant regulatory compliance cost change in staffing since the ACA's enactment.
Gross-to-Net Payroll — Withholding Liabilities and Net Pay Disbursement
Recording the complete payroll cycle — gross wages earned, all withholdings (federal/state income tax, FICA, benefits, 401k, garnishments), net pay disbursed, and employer-side tax accruals.
Accrued Wages — Period-End Accrual for Wages Earned but Not Yet Paid
Accruing wages earned by employees in the current period but not yet paid due to the timing mismatch between period-end and the next scheduled payday.
Paid Time Off (PTO) / Vacation — Accrual as Earned and Liability for Unused Balances
Accruing PTO and vacation liability as employees earn it — with the liability representing the obligation to pay employees for earned but unused vacation that must be paid upon termination.
Annual Bonus Accrual — Probability-Weighted Estimate of Year-End Bonus Expense
Accruing the estimated bonus obligation throughout the fiscal year — using the expected value of bonus payments based on current performance vs. targets.
401(k) Employer Match — Accrual and Deposit to Plan Trustee
Accruing the employer 401(k) matching contribution as employees make their deferrals — recognizing the expense when earned and depositing to the plan trustee within regulatory deadlines.
Employer Health Insurance — Self-Insured vs. Fully-Insured Premium Expense
Recording employer health insurance costs — either as monthly premiums on a fully-insured plan or as claims expense plus stop-loss on a self-insured plan — the largest employee benefit cost for most employers.
Severance — One-Time Termination Benefit (ASC 420) vs. Ongoing Benefit Arrangement (ASC 712)
Accruing severance for a workforce reduction — distinguishing between a one-time termination plan (accrued when plan is communicated) and an ongoing benefit arrangement (accrued when termination occurs).
Workforce Restructuring Charge — Accrual at Communication of Plan (ASC 420)
Recording a formal workforce restructuring charge — the total cost including severance, benefits continuation, outplacement, and other termination costs — recognized when the plan meets ASC 420 recognition criteria.
FLSA Wage & Hour — Overtime Back Pay Liability for Misclassified Workers
Accruing a liability for unpaid overtime claims arising from employee misclassification as exempt from FLSA overtime requirements or from independent contractor status — a significant contingent liability for staffing and gig economy companies.
USA — Full Gross-to-Net Payroll Cycle (Federal + State Taxes, FICA, Benefits, 401k)
Complete U.S. payroll journal entry recording gross wages, all mandatory withholdings (federal income tax, state income tax, Social Security, Medicare), voluntary deductions (401k, health insurance, FSA, HSA), employer-side payroll taxes (FICA match, FUTA, SUI), and net pay disbursement via ACH direct deposit.
USA — Salaries Payable Accrual (Period-End Cutoff — Wages Earned but Not Yet Paid)
Accruing salaries and wages earned through the accounting period-end date that will not be disbursed until the next pay date — the universal period-end cutoff entry ensuring expenses are matched to the period in which work was performed.
USA — Employer Benefit Costs (Health Insurance Employer Share + 401k Match + Other Benefits)
Recording the employer's share of employee benefits — health/dental/vision insurance premiums, 401(k) employer matching contribution, group life insurance, and other employer-paid benefits — separately from the payroll entry.
USA — Independent Contractor Payment (1099-NEC) vs. Employee — No Withholding, No Employer Taxes
Recording payments to independent contractors — no federal or state income tax withholding, no FICA, no FUTA, no SUI — with Form 1099-NEC reporting obligations when annual payments reach $600 or more.
USA — Multi-State Remote Employee Payroll (State Tax Nexus, SUI Sourcing, Reciprocity Agreements)
Payroll for employees working remotely from states other than the employer's home state — creating state income tax withholding obligations, SUI registration requirements, and potential corporate income tax nexus in each employee's work state.
Canada — Full Gross-to-Net Payroll (CPP, EI, Federal + Provincial Tax Withholding)
Complete Canadian payroll journal entry recording gross employment income, all mandatory deductions (Canada Pension Plan — CPP/CPP2, Employment Insurance — EI, federal income tax, provincial income tax), employer-side contributions (CPP match, EI premium at 1.4×), and net pay disbursement.
Canada — Quebec Payroll (QPP, QPIP, Provincial Income Tax to Revenu Québec)
Quebec-specific payroll entry recording Quebec Pension Plan (QPP) contributions replacing CPP, Quebec Parental Insurance Plan (QPIP) premiums replacing EI for parental purposes, and dual remittance to both CRA (federal income tax, federal EI) and Revenu Québec (QPP, QPIP, Quebec income tax).
UK — Full Gross-to-Net Payroll (PAYE Income Tax, National Insurance Class 1 — Employee & Employer, Student Loan, Pension Auto-Enrolment)
Complete UK payroll journal entry under HMRC's Pay As You Earn (PAYE) system — recording gross earnings, PAYE income tax deduction, employee National Insurance (Class 1), employer National Insurance (Class 1), Student Loan deductions (Plan 1/2/4), auto-enrolment pension contributions, and net pay disbursement.
UK — Employer National Insurance on Benefits in Kind (P11D, Class 1A NI) and Salary Sacrifice Arrangements
Recording Class 1A National Insurance on taxable benefits provided to employees (company cars, private medical, gym memberships) — reported via P11D and P11D(b) — and the NI and income tax treatment of salary sacrifice arrangements.
Australia — Full Gross-to-Net Payroll (PAYG Withholding, Superannuation Guarantee, State Payroll Tax)
Complete Australian payroll entry under the ATO's PAYG Withholding system — recording gross wages, PAYG tax withholding, Superannuation Guarantee contributions (11.5% in 2024/25), Medicare Levy, and state/territory payroll tax where applicable.
Germany — Full Gross-to-Net Payroll (Lohnsteuer, Solidaritätszuschlag, Sozialversicherung — KV/PV/RV/AV)
Complete German payroll entry recording gross wages, wage tax (Lohnsteuer), solidarity surcharge (Solidaritätszuschlag), church tax (Kirchensteuer), and all four branches of social insurance (Krankenversicherung, Pflegeversicherung, Rentenversicherung, Arbeitslosenversicherung) split equally between employer and employee.
France — Full Payroll (Cotisations Sociales — URSSAF, AGIRC-ARRCO, CSG/CRDS, Impôt à la Source)
French payroll entry recording gross wages, French social contributions (employer and employee shares remitted to URSSAF and AGIRC-ARRCO), income tax withholding at source (Prélèvement à la source — PAS implemented since 2019), and net pay disbursement.
UAE — Payroll (No Income Tax; End-of-Service Gratuity Accrual; DEWS/GPSSA for Nationals)
UAE payroll entry — no federal income tax or social security for expatriates; mandatory End-of-Service Gratuity (EOSG) accrual for all employees under UAE Labour Law; GPSSA social security for UAE/GCC nationals (20% employer + 5% employee); and DEWS for DIFC/ADGM employees.
Singapore — Full Payroll (CPF Contributions, SDL, Income Tax Withholding, NS Pay)
Singapore payroll entry under IRAS/CPF Board requirements — recording gross wages, Central Provident Fund (CPF) contributions for employer and employee, Skills Development Levy (SDL), and monthly tax withholding or annual IR8A filing depending on employee type.
Ireland — Full Payroll (PAYE Income Tax, PRSI, USC — Revenue's PAYE Modernisation)
Irish payroll under Revenue's PAYE Modernisation system (real-time reporting from 2019) — recording income tax (PAYE), Pay Related Social Insurance (PRSI) for employer and employee, Universal Social Charge (USC), and net pay via SEPA credit transfer.
Netherlands — Full Payroll (Loonheffing — Loonbelasting + Premies Volksverzekeringen + Premies Werknemersverzekeringen)
Dutch payroll under the loonheffing system — a combined withholding of wage tax, national insurance premiums (AOW, ANW, WLZ), employee insurance premiums (WIA, WW, ZVW), and employer-side contributions remitted monthly to the Belastingdienst.
India — Full Payroll (TDS on Salary, PF Employer/Employee, ESI, Professional Tax, Gratuity Accrual)
Complete Indian payroll entry covering Tax Deducted at Source (TDS) under Section 192, Provident Fund (PF/EPF), Employee State Insurance (ESI/ESIC), Professional Tax (state-level), gratuity accrual under the Payment of Gratuity Act, and net salary via NEFT.
How to Record RSU Vesting Expense and Payroll Taxes (ASC 718 / IFRS 2)
Clear up your equity accounting. Here are the journal entries to record RSU vesting compensation expense and handle the employer payroll tax liability.
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