Accrued Compensation

Accrued Compensation is a Balance Sheet item that refers to employee costs that a company owes to its employees but has not paid yet.

Some examples:

Wages earned but not yet paid (pay periods ending after the balance sheet recording date)

Unpaid performance bonuses

Unused vacation days

Unused sick days

Earned but not paid sales commissions

In the room

A specific flavor of accrued expenses that's worth recognizing by name, especially at year end when bonus accruals can be large enough to swing working capital meaningfully.