Date created: Oct 12, 2022 • Last updated: Oct 12, 2022
What is Payroll Expenses?
Payroll Expenses refers to the total cost associated with hiring and retaining employees and independent contractors on your payroll.
Payroll Expenses Formula
How to calculate Payroll Expenses
Assume you have 10 employees who each receive a gross annual pay of $30K, post taxes and insurance premiums. Your payroll expenses for the year would be $300,000.
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How to visualize Payroll Expenses?
You have several options to visualize your Payroll Expenses data. If you want to segment this data by department or year, choose a pie chart or bar chart. Line charts can help you see an increase or decrease in expenses yearly or monthly. Finally, a summary chart or metric view shows you the current value of the metric that you can then compare to a previous period of time. Take a look at the examples:
Payroll Expenses visualization examples
vs previous period
ChartMeasuring Payroll Expenses
More about Payroll Expenses
Payroll Expenses measures what it costs your business to hire employees and contractors. This generally refers to the salaries paid to employees, less any taxes and other costs that are submitted to a third-party on behalf of the employee (such as insurance premiums and benefits). The difference between payroll expenses for employees and contractors is that, often, contractors are only paid for the services rendered and are not provided benefits. This distinction is important for tax purposes. Generally, payroll expenses are recorded against revenue earned in the accrual form of accounting, where expenses are recorded when they are incurred.