Hello,
I want to create a journal for pay/nic, emplyee nic, employer nic, employee pension, employer pension. Could you somebody please advise the correct entries in Sage.
Thanks you
Replies (35)
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Entries
Dr Gross wages
Dr Employers NI
Dr Employers pension
Cr Net Tax deducted
Cr NI payable
Cr Net wages
Cr Pension contributions
maybe nit picking?
i would advise a novice accountant to post paye liability as a single figure, it's unnecessary to split it into tax and nic, only HMRCy care about this in their records, but they get that info via the ever-luvverly RTI.
Background
i would advise a novice accountant to post paye liability as a single figure, it's unnecessary to split it into tax and nic, only HMRCy care about this in their records, but they get that info via the ever-luvverly RTI.
So many recommendations is leaving me unsure what to do............
What is your background? Have you done any accounting studies? Maybe you should study something like AAT?
Opening Creditor
I assume you do not have a finalised opening trial balance for the previous year. The payment for the previous year's tax and NI should go the code that will be used for PAYE/NI from now on. When your accountant finalises the accounts for the previous here they should provide a set of entries to bring all balances on Sage up to date. Among those entries will be one for an accrual for the previous year's PAYE/NI due at the year end. This will cancel out the amount you have just paid.
PAYE & NIC
I post PAYE & NIC as one amount to one code. Unfortunately, you don't know what the accountant will do - can't you ask them?
2211 is a liability account and is the one you should use when paying HMRC. 7007 is for the Employer's NI when the payroll is posted each week or month.
Remember what Sage is
It's software that is a tool. You can change the codes to suit the business.
Bank Payment
You don't need to do a journal entry. The accountant will do that as part of supplying the opening balances. You just need to do a bank payment.
You don't need a Journal. The accountant will provide that when the last year's accounts are completed. You just need to do the payment.
But going forward
You don't need a Journal. The accountant will provide that when the last year's accounts are completed. You just need to do the payment.
Hannah will still need to know how to do future journals.
All of the journal
Dr Gross pay
Dr Ers NIC
Cr Net pay (I have a separate account for each employee if there isn't many; if there's a lot of employees I would reconcile the balance)
Cr PAYE & NIC
Double entry
I'm not sure, how knowledgeable you are with Double Entry, but alot of the confusion you are displaying may stem from not utilising / understanding Double Entry:
For that reason, I would keep things simple and create pairs of journals with equals and opposite entries for each of the figures until you are fully familiar with the methodology.
1. For Gross wages figures:
Dr Gross wages (P&L)
Cr Net wages (Balance sheet)
2. For Paye + Employees NIC figures:
Dr Net wages (Balance sheet)
Cr NI payable (Balance sheet)
3. For Employers NIC figure:
Dr Employers NI (P&L)
Cr NI payable (Balance Sheet)
4. For Employers pension deductions
Dr Employers pension (P&L)
Cr Net wages (Balance sheet)
I'm hoping that will cover everything for you.
Not a problem with computers
AAT?
I have done some manual bookkeeping before. Im a techno phobe- thats my problem.
It doesn't seem to be that. I think you need more knowledge of bookkeeping. You should also understand that Sage should be a help to your bookkeeping rather than your bookkeeping being a help to Sage.