This sample policy provides guidance to the finance department regarding the accrual of payroll expenses.
Payroll costs consist of salaries, wages, overtime, employee benefits and pension contributions made by the company, as well as the employer portion of statutory deductions such as employment insurance. In this policy, payroll costs are a major cost component of the company and shall be recognized as incurred. Accruals shall be made at every month-end for payroll. The finance department is responsible for accruing payroll obligations at the end of each month.