is payroll a debit or credit?
It’s a debit to wages (expenses side of balance sheet), and a credit to payroll liability (accounts payable).
On your ledger, you would record your “net payroll payable” as a debit and offset it as a credit to your cash account.
We often think of “debit” and “credit” in the wrong term. A debit will always add to a number, and a credit will decrease or subtract.
The reason we always do it wrong is because we’re often the consumer, but have to look at it from the bank or CC company’s perspective. For instance, when we use a credit card, we are subtracting money from our CC company. When we use a debit card, the “debit” part of it happens when we ADD money to the bank’s account.
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