In payroll accounting, what is a payroll journal and what purpose does it serve in the accounting cycle?

Introduction / Context:
A payroll journal is a key link between the payroll system and the accounting records of the company. Interviewers often ask for its definition to check whether the candidate understands how payroll figures flow into the general ledger and financial statements. Knowing what a payroll journal is helps you explain how salary costs, deductions, and employer contributions are translated into accounting entries.

Given Data / Assumptions:

• Payroll is processed for a specific pay period such as a month, fortnight, or week.
• Each payroll run calculates gross pay, deductions, net pay, and employer contributions.
• These amounts must be recorded in the organisation accounting system.
• A formal journal entry or report is used to post these details into the general ledger.

Concept / Approach:
In accounting, a journal is a chronological record of transactions. A payroll journal is the specialised journal that summarises all payroll related amounts for a given period. It typically includes debits to salary and wage expense accounts, employer contribution expense accounts, and credits to liabilities such as salary payable, provident fund payable, tax deducted at source, and other statutory deductions. Once this journal is prepared, it is posted to the general ledger so that the financial statements reflect payroll costs accurately. The payroll journal is therefore an internal accounting document, not a personal diary or a tax form.

Step-by-Step Solution:
Step 1: Recall the general meaning of a journal in accounting as a book or record where transactions are first recorded.Step 2: Apply this to payroll. Payroll transactions include gross pay, deductions, and employer contributions for a pay period.Step 3: Recognise that a payroll journal summarises these amounts and organises them into debit and credit entries for accounting purposes.Step 4: Review the options. Option A clearly describes an accounting record that summarises payroll expenses, liabilities, and allocations and is posted to the general ledger.Step 5: Confirm that options B, C, and D refer to a diary, tax return, or vacancy list, which are not accounting journals, and therefore are incorrect.

Verification / Alternative check:
In practice, after each payroll run the payroll or finance team typically generates a payroll journal report. This report lists total salary expense, employer pension or provident fund contributions, and all deductions. The totals are then posted as a journal entry. When auditors review salary costs, they often begin with the payroll journal to trace entries into the general ledger. This confirms that the description in option A matches how a payroll journal is used in real organisations.

Why Other Options Are Wrong:
Option B treats the payroll journal as a personal diary, which has no place in formal accounting. Option C assumes it is an income tax return filed with authorities, but tax returns are regulatory forms, not internal journals. Option D suggests it is a recruitment document about job vacancies, which is unrelated to recording payroll expenses and liabilities. None of these reflect the structure or purpose of a true accounting journal.

Common Pitfalls:
Some candidates confuse the payroll register, which lists individual employee amounts, with the payroll journal, which summarises totals for accounting entries. Others think that because payroll is run in software, a separate journal is not needed. In reality, even if the journal is generated automatically, the concept is still important. The payroll journal ensures that the payroll figures are correctly transferred into the accounting system in a controlled and auditable way.

Final Answer:
A payroll journal is the accounting record in which payroll expenses, liabilities, and related allocations are summarised and posted to the general ledger for a specific pay period.