The following are the differences of the two:
- Payroll Expenses is an Expenses account while Payroll Liability is a Liability Account.
- Payroll Expense is presented in the Income Statement while Payroll Liability is in the Balance Sheet.
- Payroll Expenses is the amount of salary/wages incurred regardless of being paid or not while Payroll Liability is the amount of incurred not yet paid as of the end of the reporting period.
- Payroll Expenses is a temporary account, meaning it will be closed every end of Fiscal Year while Payroll Liabilities are permanent accounts not closed every end of FY.