Accounting for bonus paid a month earlier

Accounting for bonus paid a month earlier

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Could anyone please help me on bookkeeping in Sage.  In March bonus figures were not included in March payroll as the bonus figures were not known yet at the time when time sheets were sent to the payroll office. However the company paid the bonuses together with salaries as couple days later when the BACS payments were processed the bonuses were calculated.

And now in April the bonuses were included in monthly payroll. How do I account for it?

In the report from the payroll office the gross figures include the bonuses and then in 'deductions' column the bonuses figures are listed so net pay column doesn't include the bonuses (which were alredy paid in the previous month).

This are bookkeeping entries from previous month:

DR 7020 - gross salaries for March (excluding bonuses)

CR 2212 - gross salaries for March (excluding bonuses)

And then

DR 2212 - net salaries (including bonuses)

CR 1200 bank - net salaries (including bonuses)

And now this month:

DR 7020 - gross salaries for April (including bonuses paid by BACS in March)

CR 2212 - gross salaries for April (incl bonuses paid by by BACS in March)

And now how to account for the bonuses to reduce net figures?

For sure need to DR 2212 to reduce net figures but which nominal code shall I credit?

I would appreciate your help.

Replies (5)

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By tom123
29th Apr 2017 14:53

Out of interest, how did you arrive at the amounts of net pay that you paid and are now deducting?

PAYE and NI needs to be in your journal somewhere.

Your 7020 figure seems correct in aggregate.

I think you will find the balance will be tax / ni

Thanks (1)
Replying to tom123:
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By Madi
29th Apr 2017 15:04

Of course, NI, PAYE and NEST are deducted from gross as well to get to the Net figure (CR each of these liability accounts and DR 2212). I didn't include these in my post as I have query only on the bonus part.

Thanks (0)
Scalloway Castle
By scalloway
29th Apr 2017 16:03

If the bonuses were paid but not in the payroll journal you should do the entry in March.

Dr Bonus
Cr Net pay due
Cr Tax & NI payable.

Then reverse it in April.

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By johngroganjga
29th Apr 2017 18:30

Just accrue the gross bonus and the employer's NI on it.

Job done.

I believe you are over thinking. Accounting challenges don't get much simpler than this.

Thanks (1)
Replying to johngroganjga:
RLI
By lionofludesch
30th Apr 2017 08:53

Don't forget the employer's share of NEST.

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