To add a cost center so you can charge a payroll item to it navigate to People Manger - Centers

Click New at top right.

Give the cost center a name that helps you understand this is a accounting type cost center. For example you might be creating a cost center to charge Sick time to.  Create a cost center called SickTime. If you are creating one for paying admin staff you might create one called administration. You can be specific about the name so that when reports are printed it will help accounting understand how to post the payroll charge.

You only need to add the name and timezone. Nothing else needed.