Wages payable refers to the amount of money a company owes its employees for work performed but has not yet been paid. This liability appears on the company's balance sheet as a current liability, indicating that it is expected to be settled in the near future, typically within a year. When employees complete their work, the company records the wages earned as an expense. However, if the payment is not made immediately, it creates a wages payable obligation. This ensures that the company's financial statements accurately reflect its liabilities and expenses, providing a clear picture of its financial health.