# Payslip and expense question **URL:** \ **Category:** Uncategorized\ **Created:** [July 2, 2023, 5:52am UTC](https://forum.manager.io/t/payslip-and-expense-question/47705 "2023-07-02T05:52:11Z")\ **Posts on this page:** 12\ **Page:** 1
**Author:** ![Mahfuzur\_Rahman](https://avatars.discourse-cdn.com/v4/letter/m/779978/32.png) [@Mahfuzur\_Rahman](https://forum.manager.io/u/Mahfuzur_Rahman)\ **Post date:** [July 2, 2023, 5:52am UTC](https://forum.manager.io/t/payslip-and-expense-question/47705/1 "2023-07-02T05:52:11Z")
When I issue a payslip, then employee clearing account increase.its ok. But, I found expense account increase the same amount with showing payslip. here is the screenshot: ![image](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/3X/3/c/3c6b60e55380acc6f2dc7143063356246dfe5e0e.png) ![image](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/3X/f/7/f7d21ce43caaba18ea94763460722934c30eedb9.png) ![image](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/3X/c/f/cff1af45fdd81bfe415cd7b3eead08c23c830dbb.png) ---
**Author:** ![eko](https://avatars.discourse-cdn.com/v4/letter/e/a8b319/32.png) [@eko](https://forum.manager.io/u/eko)\ **Post date:** [July 2, 2023, 6:56am UTC](https://forum.manager.io/t/payslip-and-expense-question/47705/2 "2023-07-02T06:56:58Z")
This is not a bug, read the section on Payslip effects in the guides at [Issue payslips | Manager](https://www.manager.io/guides/9752) ---
**Author:** ![Mahfuzur\_Rahman](https://avatars.discourse-cdn.com/v4/letter/m/779978/32.png) [@Mahfuzur\_Rahman](https://forum.manager.io/u/Mahfuzur_Rahman)\ **Post date:** [July 2, 2023, 10:38am UTC](https://forum.manager.io/t/payslip-and-expense-question/47705/3 "2023-07-02T10:38:44Z")
What is the effect of Payment to employee for a payslip? Payslip increase liability. Payment increase expense. I read the full guide. ---
**Author:** ![Shan](https://avatars.discourse-cdn.com/v4/letter/s/7ab992/32.png) [@Shan](https://forum.manager.io/u/Shan)\ **Post date:** [July 2, 2023, 11:01am UTC](https://forum.manager.io/t/payslip-and-expense-question/47705/4 "2023-07-02T11:01:16Z")
@Mahfuzur_Rahman when you create a payslip, it’ll increase liability on BS and it’ll increase your salary expenses on your P&L. Payment is not in the picture here. when you make payment for that payslip, it’ll decrease the amount from the liability. Please read and understand as @eko advised you. ---
**Author:** ![Joe91](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/joe91/32/35781_2.png) [@Joe91](https://forum.manager.io/u/Joe91)\ **Post date:** [July 2, 2023, 11:03am UTC](https://forum.manager.io/t/payslip-and-expense-question/47705/5 "2023-07-02T11:03:08Z")
Payslip effect Debit/Increase expense (Salary account in this case) Credit/Increase liability (Employee clearing account) Pay wages Debit/Decrease Liability (Employee clearing account) Credit/Decrease Bank account(Whatever bank or cash account you made the payment from) Check out [www.accountingcoach.com](http://www.accountingcoach.com) ---
**Author:** ![eko](https://avatars.discourse-cdn.com/v4/letter/e/a8b319/32.png) [@eko](https://forum.manager.io/u/eko)\ **Post date:** [July 2, 2023, 2:42pm UTC](https://forum.manager.io/t/payslip-and-expense-question/47705/6 "2023-07-02T14:42:16Z")
> [@Mahfuzur\_Rahman](#): > > Payment increase expense. You haven not made a payment against the payslip, you only issued a payslip. Only when you make an actual payment will the liability clear. Similar to Purchase invoices the expense will be recorded at the moment you create the Payslip but that does not mean you have paid it yet. ---
**Author:** ![Mahfuzur\_Rahman](https://avatars.discourse-cdn.com/v4/letter/m/779978/32.png) [@Mahfuzur\_Rahman](https://forum.manager.io/u/Mahfuzur_Rahman)\ **Post date:** [July 2, 2023, 3:19pm UTC](https://forum.manager.io/t/payslip-and-expense-question/47705/7 "2023-07-02T15:19:10Z")
So, why it is showing in expense? Note: I’m not create any payment. ---
**Author:** ![Joe91](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/joe91/32/35781_2.png) [@Joe91](https://forum.manager.io/u/Joe91)\ **Post date:** [July 2, 2023, 4:08pm UTC](https://forum.manager.io/t/payslip-and-expense-question/47705/8 "2023-07-02T16:08:35Z")
You have incurred the expense by creating the payslip and creating the liability to the employee The P & L is affected as soon as you create the liability ---
**Author:** ![eko](https://avatars.discourse-cdn.com/v4/letter/e/a8b319/32.png) [@eko](https://forum.manager.io/u/eko)\ **Post date:** [July 2, 2023, 5:06pm UTC](https://forum.manager.io/t/payslip-and-expense-question/47705/9 "2023-07-02T17:06:07Z")
> [@Mahfuzur\_Rahman](#): > > So, why it is showing in expense? Note: I’m not create any payment. That is the principle of accrual accounting compared to cash accounting. The expense gets recorded at the moment of issuing the payslip. You will notice that once you clear the liability through actual payment of the payslip that this payment will not show in the Profit and Loss account as it already appeared there. ---
**Author:** ![Mahfuzur\_Rahman](https://avatars.discourse-cdn.com/v4/letter/m/779978/32.png) [@Mahfuzur\_Rahman](https://forum.manager.io/u/Mahfuzur_Rahman)\ **Post date:** [July 3, 2023, 12:50am UTC](https://forum.manager.io/t/payslip-and-expense-question/47705/10 "2023-07-03T00:50:03Z")
Thanks. But, in the cash basis summary showing the same. ---
**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:** [July 3, 2023, 1:44am UTC](https://forum.manager.io/t/payslip-and-expense-question/47705/11 "2023-07-03T01:44:05Z")
That is a characteristic and shortcoming of cash basis accounting (among others). If you are not immediately paying employees for earnings recorded on payslips, you have a problem. You have incurred the expense without paying it. But you are still liable to the employee. Where are all those credits and debits supposed to go? This is the reason cash basis accounting requires more than just switching when you recognize income and expenses. It requires significant alteration of many accounting practices. Otherwise, your financial statements misrepresent position and performance, at least temporarily. ---
**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:** [July 5, 2026, 8:00pm UTC](https://forum.manager.io/t/payslip-and-expense-question/47705/12 "2026-07-05T20:00:55Z")
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