Forum

• # 86752
• Wed 21 Nov 2012 04:29 PM

Hi


Probably being dense but i have finished my first months payroll which was October 2012 and now dealing with November 2012. How do i transfer the Income Tax, NI liablility, and net wages to my nominal ledgers. How do i show net wages once they have been paid out from the bank.


Do i 



DR Gross Wages

CR Income Tax 2210

CR NI 2211

CR Net Wages 2220


Then


When the payments have been made


CR Bank with employees payments, payments to HMRC

DR net wages

DR NI payment to HMRC

DR Income Tax  to HMRC    


Can anyone let me know as i dont want to do this wrong. 


                       


 


      


        

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• # 86753
• Wed 21 Nov 2012 05:06 PM

That's how I would do it.  If you do it on a journal then you can make sure it balances.  The gross wages posted to the p&l will balance with the net wages + tax + NI posted to the balance sheet.


The payments can be done through bank postings.  


Hope this gives you confidance to 'go for it!'


Regards



    

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  Regards
  Jocelyn

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• # 86760
• Wed 21 Nov 2012 05:46 PM

Hi,

I agree, I would post the wages journal entering the Gross Wages & Employers NI to the P&L Accounts and posting Credit entries on your Income Tax. NI & Net Wages accounts within the 2xxx range, then when payments are made you Credit the Bank and Debit the Income Tax, NI and Net Wages accounts, which should then leave those accounts with zero balances to show that the correct payments have been made.


I hope this helps, good luck with your posting.


Kind regards

Kirsten    

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• # 86762
• Wed 21 Nov 2012 05:55 PM

Hi Domino

Are you running this payroll for a client.

Kind regards
Stuart

• Forum Moderator, South East & Greater London Regional Chairman
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• # 86770
• Wed 21 Nov 2012 08:32 PM

Journal as follows;

DR gross wages
DR employers Ni
CR employers and employees Ni
CR net wages
CR income tax

Then when the wages are paid;

CR bank
DR net wages
 
Then when the Paye is paid;

CR bank
DR  employers and employees Ni
Dr income tax  

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• # 86793
• Thu 22 Nov 2012 12:52 PM

Thanks Guys just started to get a bit overwhelmed.


I am practicing my skills with the company i work for as the Directors said that i could do their payroll under the supervision of the accountant. I am just waiting to take my payroll exam.


  

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• # 86795
• Thu 22 Nov 2012 02:05 PM

Thats a good result Domino nothing beat practical experience.

Kind regards
Stuart

PS best of luck with your final payroll assessment

• Forum Moderator, South East & Greater London Regional Chairman
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• # 86799
• Thu 22 Nov 2012 02:59 PM

Well done Domino,  I've been pitching local accountants on the "I'll do the crud if you do the supervising" stance.  You've achieved an enviable position.

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  Chris
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