Cost centers specify which General Ledger accounts are updated by payroll activities. The gross salary amount posts to an expense account, while the net amount posts to a checking account.
By associating cost centers with an employee's record, you can track wages paid to a single employee or group of employees, pay different portions of employees' wages from multiple checking accounts, and track other forms of employee compensation such as pensions and housing allowances. If you track each employee's pay separately, use a different cost center for each employee. However, if you track payroll as one expense account, you can use the same cost center for each employee.
You can make cost centers as general or as specific as you need them to be. You can use general personnel accounts to track office or day care personnel. You can use an expense account to track an employee's position in the organization (such as Salary/Senior Pastor and Salary/Financial Secretary), or you can create a specific line item expense account (such as Pastor/Housing Allowance or Pension/Family Counselor).
In Payroll Define Lists, you can: