--- title: "Payroll Journal Entry Overview" slug: "payroll-journal-entry-overview" description: "Payroll JEs in R365: how DSS labor accruals are created, how actual payroll JEs replace estimates, liability tracking, and the clearing process." updated: 2026-08-18T15:46:06Z published: 2026-08-18T15:46:06Z canonical: "docs.restaurant365.com/payroll-journal-entry-overview" --- > ## Documentation Index > Fetch the complete documentation index at: https://docs.restaurant365.com/llms.txt > Use this file to discover all available pages before exploring further. # Payroll Journal Entry Overview Payroll journal entries record payroll-related financial transactions, including wages, taxes and deductions, within the general ledger. These entries reflect payroll data imported from a payroll provider or manually entered to align labor expenses with financial reporting. Payroll journal entries are used to reconcile labor accruals from POS data for each day of the pay period. There are three unique fields on a payroll journal entry transaction that set it apart from a normal journal entry transaction: - Payroll Start Date - Records the start date for the pay period. - Payroll End Date - Records the end date for the pay period. - The Payroll Estimate Clearing tab - Displays the reversing entry of all the labor accrual entries. Labor accrual entries are created using two sources: - Hourly Wages - Imported through the POS integration and created by matching job titles and labor punches. Hourly wages appear in the [Labor section](/doc/docs/labor-review) of the daily sales summary (DSS). - Salaried Wages - Set using the Daily Manager Salary field on the Labor Estimate tab of the location record. > Labor totals are not calculated for employees in polled data who have both of the following settings enabled on their [R365 employee record](https://docs.restaurant365.com/docs/employees): > > - Exclude Labor Hours > - Exclude Labor $ > > This exclusion applies to labor rules, daily sales summary, and labor reporting. These employees’ punch details will display $0 and 0 hours. > > > > ![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-1QDRK3MQ.png) > This article references the [new journal entry experience](/doc/docs/journal-entry-update-2025), which will be enabled for all customers in 2026. > > At that time, the classic payroll journal entry experience will no longer be supported. > > See [classic payroll journal entry documentation](/doc/docs/classic-payroll-journal-entries). --- ## Prerequisites Ensure that all related daily sales summaries are approved before creating a payroll journal entry. If all of the Labor information is not approved, the payroll journal entry will not clear out the accrued payroll account properly. Learn more about [approving a payroll journal entry.](/doc/docs/approve-a-payroll-journal-entry) --- ## Security **The following permissions are associated with payroll journal entries:** - General Ledger → Payroll Journal Entries → View Payroll JEs - General Ledger → Payroll Journal Entries → Edit Payroll JEs - General Ledger → Payroll Journal Entries → Create Payroll JEs - General Ledger → Payroll Journal Entries → Approve Payroll JEs - General Ledger → Payroll Journal Entries → Unapprove Payroll JEs - General Ledger → Payroll Journal Entries → Approve Payroll JEs These permissions can be added to [custom user roles](https://restaurant365.us.document360.io/doc/docs/custom-user-roles) or [individual users](https://restaurant365.us.document360.io/doc/docs/users-overview-and-security). The [Permission Access report](https://restaurant365.us.document360.io/doc/docs/generating-a-permissions-access-report) can be used to determine which user roles or users already have these permissions assigned. For more information, see [User Setup and Security](/doc/docs/user-setup-security-and-location-access). --- ## Payroll Liability The Accrued Payroll Account drop-down on the Labor Estimates tab of the [Location record](/doc/docs/legal-entities-location-record) specifies the GL account used to record payroll liability in Restaurant365. This account is credited daily as labor costs are imported from the POS and posted through the Daily Sales Summary. Each daily entry represents an estimated labor accrual, building the payroll liability over the course of the pay period. ![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-A0R118AA.png) These daily accruals are reversed when the payroll journal entry is posted. On the date of the payroll journal entry, the system trues up the estimated labor by debiting the Accrued Payroll Account and replacing the estimates with actual payroll amounts. This process clears the accrual balance, so the GL account should return to zero if all accruals and payroll entries are properly aligned. Payroll liability activity—including daily accruals and the corresponding reversal entries—can be reviewed in the GL Account Detail report. --- ## Estimated Labor and Clearing Labor data in Restaurant365 is derived from two sources: [Daily Sales Summary](/doc/docs/daily-sales-summary-dss-classic) (DSS) journal entries and payroll journal entries. DSS labor journal entries provide estimated labor costs based on [POS imports](/doc/docs/pos-integration-overview), while payroll journal entries reflect actual payroll expenses processed through a third-party payroll provider. When a DSS is approved, R365 automatically creates three types of journal entries—Sales, Statistical, and Labor. The labor journal entry is an estimate generated from hours worked and pay rates mapped to job titles in R365. This estimated labor data powers labor reporting throughout R365 and supports visibility into labor costs on profit and loss statements. However, this estimate is not final and will be replaced with actual data once payroll is processed. Payroll journal entries are created using the [Payroll Journal Entry record](/doc/docs/payroll-journal-entry-record)—not the standard Journal Entry form—and must include the pay period start and end dates. These entries clear the DSS labor accruals for the matching period and provide actual payroll data at the account level. Upon approval, R365 matches the payroll journal to the relevant DSS labor entries, [clears the estimated amounts](/doc/docs/est-act-payroll-journal-entries), and records the net differences. This ensures that only actual payroll costs remain in the system. Variances between estimated and actual labor are shown on the Distribution tab, while cleared DSS labor is tracked on the Payroll Estimate Clearing tab. --- ### FAQ #### Why does my payroll journal entry double the accrual reversal at period end? A doubled reversal usually means the Accrued Payroll Account was cleared more than once for the same pay period — most often because the payroll journal entry was approved twice, a manual journal entry duplicated the reversal, or the entry was unapproved and re-approved after the automatic reversal had already posted. Pull the [GL Account Detail report](https://docs.restaurant365.com/docs/en/gl-account-detail) for the Accrued Payroll Account and check for more than one reversing entry in the period; if the entry was unapproved and re-approved, see [Unapprove a DSS after Running Payroll](https://docs.restaurant365.com/docs/en/unapprove-a-dss-after-running-payroll) for how that affects the accrual. #### Why doesn’t my payroll journal entry match my expected period-end totals? Mismatched totals are usually caused by a pay period that crosses an accounting period boundary, labor that was imported or approved after the Daily Sales Summary should have cleared, or a job title or pay rate mapping change mid-period. Confirm every Daily Sales Summary for the pay period is [approved](https://docs.restaurant365.com/docs/en/daily-sales-approve-a-dss) before creating the payroll journal entry, then compare the variance shown on the Distribution tab against any mapping changes made during the period. #### Why won’t my payroll journal entry approve? Approval most often fails because the Payroll Start Date or Payroll End Date is missing, the entry is out of balance, or the approving user lacks the Approve Payroll JEs permission. Confirm both dates are populated and the Distribution tab is in balance, then check that the user has **General Ledger → Payroll Journal Entries → Approve Payroll JEs** under [User Setup, Security, and Location Access](https://docs.restaurant365.com/docs/en/user-setup-security-and-location-access). See [Approve a Payroll Journal Entry](https://docs.restaurant365.com/docs/en/approve-a-payroll-journal-entry) for the full approval process. ****What happens if a Daily Sales Summary is unapproved or missing when I create a payroll journal entry?**** Every Daily Sales Summary in the pay period must be approved before the payroll journal entry is created, since each approved Daily Sales Summary contributes the estimated labor accrual that the payroll journal entry is meant to clear. An unapproved or missing Daily Sales Summary means its labor accrual either has not posted or is incomplete, so the payroll journal entry cannot fully clear the Accrued Payroll Account for that period, leaving a variance on the Distribution tab. Pull the GL Account Detail report for the Accrued Payroll Account to identify which dates in the pay period are missing a reversing entry, then check the [Daily Sales Summary](/doc/docs/daily-sales-page) page for those dates. Approve any Daily Sales Summary that is pending, or see Missing and Out of Balance Daily Sales Summaries for how to repoll a Daily Sales Summary that never generated. If a Daily Sales Summary was previously approved and later unapproved, see [Unapprove a DSS after Running Payroll](/doc/docs/unapprove-a-dss-after-running-payroll) for how that affects the accrual before creating the payroll journal entry. POS (Point of Sale) A system used by businesses to process sales transactions and manage customer payments. Connected to R365 through a [POS integration](/doc/docs/pos-integration-overview). A defined date range on the payroll calendar during which employee hours and earnings are accumulated. When a pay period ends, R365 automatically creates a pay run for that period. Journal entry (JE) Record posted to the General Ledger to document financial activity. An accrual is an amount recorded when it’s earned or incurred rather than when it’s paid or received. Daily sales summary (DSS) Record generated by daily data sent from the POS that may include sales, labor, menu items, and payment details. A restaurant or business site under a legal entity where operational and financial activity is tracked in R365. A journal entry created automatically when a pay run is approved, recording wages, taxes, deductions, and employer contributions to the general ledger. It must be reviewed and approved separately from the pay run itself. Access rights granted to users or user roles that dictate what actions they can perform within the system. Financial account used to record specific transactions in the general ledger. The value recorded for an account, metric, or activity that reflects what actually occurred, not what was scheduled, estimated, ordered, planned, or forecasted. Daily sales summary (DSS) Record generated by daily data sent from the POS that may include sales, labor, menu items, and payment details. Restaurant365 Process of retrieving and updating prior-day POS data to replace existing DSS information. ## Related - [Payroll Journal Entries](/payroll-journal-entries.md) - [Approve a Payroll Journal Entry](/approve-a-payroll-journal-entry.md)