# Paying employees does not affect the income statement **URL:** \ **Category:** Uncategorized\ **Created:** [March 19, 2018, 9:19am UTC](https://forum.manager.io/t/paying-employees-does-not-affect-the-income-statement/14966 "2018-03-19T09:19:03Z")\ **Posts on this page:** 12\ **Page:** 1
**Author:** ![Kashef](https://avatars.discourse-cdn.com/v4/letter/k/e36b37/32.png) [@Kashef](https://forum.manager.io/u/Kashef)\ **Post date:** [March 19, 2018, 9:19am UTC](https://forum.manager.io/t/paying-employees-does-not-affect-the-income-statement/14966/1 "2018-03-19T09:19:03Z")
when i pay an employee, the entry affect the balance sheet only and not reflected in the income statement as an expense under wages and salaries ---
**Author:** ![sharpdrivetek](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/sharpdrivetek/32/34244_2.png) [@sharpdrivetek](https://forum.manager.io/u/sharpdrivetek)\ **Post date:** [March 19, 2018, 9:40am UTC](https://forum.manager.io/t/paying-employees-does-not-affect-the-income-statement/14966/2 "2018-03-19T09:40:57Z")
have you made the spend money transaction for the payslip? [https://guides.manager.io/9768](https://guides.manager.io/9768) ---
**Author:** ![Kashef](https://avatars.discourse-cdn.com/v4/letter/k/e36b37/32.png) [@Kashef](https://forum.manager.io/u/Kashef)\ **Post date:** [March 19, 2018, 10:01am UTC](https://forum.manager.io/t/paying-employees-does-not-affect-the-income-statement/14966/3 "2018-03-19T10:01:20Z")
yes. 1. i entered an employee info in the employee tab 2)i pressed on new payslip, checked the employee name and filled the amount needed to be paid to him (Cash) 2. pressed spend money cash transaction and checked the cash account instead of suspense account the cash account decreased with the amount and a suspense account was created in the equity. wages and salaries are still (-) ---
**Author:** ![Abeiku](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/abeiku/32/44970_2.png) [@Abeiku](https://forum.manager.io/u/Abeiku)\ **Post date:** [March 19, 2018, 10:31am UTC](https://forum.manager.io/t/paying-employees-does-not-affect-the-income-statement/14966/4 "2018-03-19T10:31:44Z")
If you enter a payslip wages is debited , employee clearing account is credited If you want to pay the salary through bank or cash, credit bank/cash (spend money) debit Employee clearing account. The first is accruing expenditure which brings expense (wages account) and liability (employee clearing account) The second part (payment) is settling the liability. Losing cash (crediting bank/cash) to eliminate the liability. The second is a balance sheet activity. The first is Balance sheet and income statement ---
**Author:** ![Kashef](https://avatars.discourse-cdn.com/v4/letter/k/e36b37/32.png) [@Kashef](https://forum.manager.io/u/Kashef)\ **Post date:** [March 19, 2018, 10:40am UTC](https://forum.manager.io/t/paying-employees-does-not-affect-the-income-statement/14966/5 "2018-03-19T10:40:54Z")
i understand that but the problem is when i spend money the cash account and employee clearing accounts only get affected by the transaction and the wages and salaries under the expenses stays empty ---
**Author:** ![sharpdrivetek](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/sharpdrivetek/32/34244_2.png) [@sharpdrivetek](https://forum.manager.io/u/sharpdrivetek)\ **Post date:** [March 19, 2018, 11:32am UTC](https://forum.manager.io/t/paying-employees-does-not-affect-the-income-statement/14966/6 "2018-03-19T11:32:10Z")
please upload screenshots of your payslip and spend money transaction edit screens. ---
**Author:** ![Kashef](https://avatars.discourse-cdn.com/v4/letter/k/e36b37/32.png) [@Kashef](https://forum.manager.io/u/Kashef)\ **Post date:** [March 19, 2018, 12:06pm UTC](https://forum.manager.io/t/paying-employees-does-not-affect-the-income-statement/14966/7 "2018-03-19T12:06:29Z")
![Picture2](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/2X/4/435ec3450913e398807ae1c7089d8ceb38eadf04.png) ![Picture4](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/2X/0/0289ce339f9a18ac650b605269c01b7faad9d82b.png) ![Picture3](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/2X/9/9797136022939777e65464bc7e3424ec7336dcc2.jpg) ---
**Author:** ![sharpdrivetek](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/sharpdrivetek/32/34244_2.png) [@sharpdrivetek](https://forum.manager.io/u/sharpdrivetek)\ **Post date:** [March 19, 2018, 12:22pm UTC](https://forum.manager.io/t/paying-employees-does-not-affect-the-income-statement/14966/8 "2018-03-19T12:22:33Z")
you did not show the edit screen of your payslip. without that we cannot be sure to which account you have allocated the amount. ---
**Author:** ![Kashef](https://avatars.discourse-cdn.com/v4/letter/k/e36b37/32.png) [@Kashef](https://forum.manager.io/u/Kashef)\ **Post date:** [March 19, 2018, 12:27pm UTC](https://forum.manager.io/t/paying-employees-does-not-affect-the-income-statement/14966/9 "2018-03-19T12:27:59Z")
![Picture6](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/2X/0/0529437472166a97d7362016c99b376861d4feb7.png) ![Picture7](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/2X/7/7e0be83b432e836a36acfe8c59ddeef6a7630d07.png) ---
**Author:** ![sharpdrivetek](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/sharpdrivetek/32/34244_2.png) [@sharpdrivetek](https://forum.manager.io/u/sharpdrivetek)\ **Post date:** [March 19, 2018, 12:31pm UTC](https://forum.manager.io/t/paying-employees-does-not-affect-the-income-statement/14966/10 "2018-03-19T12:31:15Z")
as suspected you have not created any accounts. you should read the guides properly if you are confused with things. [https://guides.manager.io/9752](https://guides.manager.io/9752) [https://guides.manager.io/9667](https://guides.manager.io/9667) ---
**Author:** ![Tut](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/tut/32/3286_2.png) [@Tut](https://forum.manager.io/u/Tut)\ **Post date:** [March 19, 2018, 1:37pm UTC](https://forum.manager.io/t/paying-employees-does-not-affect-the-income-statement/14966/11 "2018-03-19T13:37:41Z")
> [@Kashef](#): > > when i pay an employee, the entry affect the balance sheet only and not reflected in the income statement as an expense under wages and salaries Everything @Abeiku and @sharpdrivetek have told you is true. But you can forget all the discussion about showing edit screens, creating employees, and everything else. Your problem comes from misunderstanding how payroll functions work together in an accrual based accounting system. The expense is registered when you create the payslip, not when you pay the employee. Paying the employee only discharges the liability in _Employee clearing account_. The fact that you now have something in _Suspense_ means you did not select an account for the payment. See this Guide: [Manager Guides](https://guides.manager.io/7106). ---
**Author:** ![Ealfardan](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/ealfardan/32/63166_2.png) [@Ealfardan](https://forum.manager.io/u/Ealfardan)\ **Post date:** [January 18, 2023, 3:12pm UTC](https://forum.manager.io/t/paying-employees-does-not-affect-the-income-statement/14966/12 "2023-01-18T15:12:17Z")