This guide explains how you can use the Employment Hero Payroll platform to map your payroll transactions to the correct accounts in your accounting system. Doing so ensures accurate tracking of your payroll expenses and liabilities.
Getting started
Once you have connected a journal service and imported your chart of accounts, you can map those accounts to different payroll transaction types. The chart of accounts page consists of two sections:
- Primary accounts: These accounts are required and are the accounts that will be used if no Location Specific Accounts are mapped.
- Location Specific Accounts: These accounts are used to override the primary accounts for transactions at a given location.
Mapping accounts to transaction types
Journals are produced based on the GL account that is mapped to the transaction type. The transactions are created based on a transaction hierarchy. The hierarchy is defined as follows:
- Top Level: Default Account Mappings
- Second Level: Pay Category Mappings, Deduction Category Mappings, Expense Category Mappings, Employer Liability Mappings
- Third Level: Location-specific default account mappings
- Fourth Level: Location-specific Pay Category Mappings, Deduction Category Mappings, Expense Category Mappings, Employer Liability Mappings
Transactions are matched to the GL account from the lowest level to the highest level.
Default transaction types
- Payment Account – used to reconcile the net payment amount of the payroll to the transaction from your bank account (often called the 'payroll clearing' account)
- Wages Expense Account – used to record the gross wages expense for the pay run
- Default Payroll Liability Account – records common employee payroll deductions providing there is no specific liability account set up
- Tax Liability Account – used to track your tax liability transactions
- CPF Employer Expense Account – used to track your CPF expense transactions
- CPF Employer Liability Account – used to track your CPF liability transactions
- CPF Employee Liability Account – used to track your employees' CPF liability transactions
- SDL Employer Expense Account – used to track Skills Development Levy expenses
- SDL Employer Liability Account – used to track your Skills Development Levy liabilities
- Employee Expenses Account – used to record any employee expenses processed within the pay run (expenses are not deemed part of employee wages)
Chart of Accounts management
Pay category transaction accounts are used to allocate specific wage expenses to different GL accounts. For example, you may want to track bonuses, paid leave or allowances paid to different GL accounts. To do this, you need to map a different GL account for the specific pay category.
If you do not specify a pay category transaction account, the default Wages Expense Account will be used.
To access Pay category transaction accounts:
- Click the Business icon.
- Click the Payroll Settings submenu.
- Under BUSINESS SETTINGS, click Chart of Accounts.
- Click Pay Categories.
You will then see the following table:
Deduction Category Transaction Accounts are used to allocate specific deductions to different GL accounts.
If you do not specify a deduction account, the Default Payroll Liability Account will be used by default.
Assigning a GL account to the Expense Account is optional. It should only be done if you want the deduction amount to be recorded as a debit in the specified GL account. The exact deduction amount will then also apply to the balance of the Wages GL account.
To access your Deduction category transaction accounts:
- Click the Business icon.
- Click the Payroll Settings submenu.
- Under Business Settings, click Chart of Accounts.
- Click Deduction Categories.
You will then see the following table:
Expense category transaction accounts are used to allocate specific expenses to different GL accounts. If you do not specify an expense account, the transactions will be posted to the Employee Expenses Account by default.
To access your Expense Categories:
- Click the Business icon.
- Click the Payroll Settings submenu.
- Under Business Settings, click Chart of Accounts.
- Click Expense Categories.
You will then see the following table:
Splitting by employing entity and location
The chart of accounts can now be split by both employing entity and location for file export and detailed file export journal types. Simply map the accounts as required, and the journal will generate accordingly. This enhancement allows for more granular and relevant financial data, helping businesses track transactions more accurately across different locations and employing entities.
Splitting by employing entity
If you have set up multiple employing entities, your chart of accounts can now reflect the split of earnings accordingly. Your journal export will display the earnings split under the Entity column.
Note: You will need a working integration into File Export or Detailed File Export to be able to publish multi-entity chart of accounts.
Your journal export will display the earnings split as specified in the chart of accounts, under the Entity column.
Splitting by location
When mapping your default GL accounts, you will notice an option to "Split by location." This allows you to write a transaction line per location to the journal for the same account. This feature is particularly useful for businesses that use locations, classes, or tracking categories in their accounting software.
Note: If you also want to assign classes to your journal entries, ensure that you have assigned classes to your locations.
Location-Specific Accounts
If you want to split your GL by location and allocate transactions to different GL accounts, you can define location-specific accounts. These accounts function the same way as primary accounts but apply only to the specified location.
Entity-Specific Accounts
If you want to split your GL by entity and allocate transactions to different GL accounts, you can define entity-specific accounts. These accounts function the same way as primary accounts but apply only to the specified entity.
How entity specific accounts work
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Employing Entity Specific Accounts allow you to override primary and location-specific accounts at the employing entity level.
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If an employing entity account is mapped, it will take precedence over primary and location-specific accounts.
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This feature applies only to file export and detailed file export journal types.
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Your journal export will now display the employing entity split under the Entity column of an exported spreadsheet.
Setting up employing entity specific accounts
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Navigate to Payroll Settings > Chart of Accounts.
- Scroll down to Entity specific accounts.
- Click Add.
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Select the employing entity for which you want to map accounts, using the drop down menu.
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Assign GL accounts for relevant transaction types.
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Save your configuration.
Important Notes on setting up specific employing entity specific accounts
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If you set up employing entity-specific accounts, location-specific accounts cannot be used.
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You must have a working File Export or Detailed File Export integration to use this feature.
When users need to change a particular account, it can be difficult to find the desired entry when they are dealing with multiple sets of Location Specific Accounts.
As a solution, users can access the Chart of Accounts panel and click the Export Configuration button (highlighted in the screenshot below) to generate an Excel spreadsheet that details which accounts are used across the whole Chart of Accounts.
Users can also export their Chart of Accounts configuration by accessing the Business icon, then clicking Payroll Settings > Data Extracts.
As shown in the screenshot below, the Data type and File format dropdowns will then appear along with the Download button.
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