My business hires independent contractors who are paid monthly for their earnings in the previous month (i.e. earnings from August 1-15 will be paid out on September 1st). However, I deduct a $5 fee from their wages for payroll processing.

So how would I journalize this $5 deduction? Would it be considered revenue or something else?

Example: Employees get 70% commission of sales. Employee B sells $100 and is to be paid $70 next pay period. In the next pay period I have to deduct the $5 payroll fee from Employee B's earnings.