PAYE & NIC

PAYE & NIC

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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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Scalloway Castle
By scalloway
05th May 2015 20:34

Entries

Dr Gross wages

Dr Employers NI

Dr Employers pension

Cr Net Tax deducted

Cr NI payable

Cr Net wages

Cr Pension contributions

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Replying to leicsred:
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By abelljms
06th May 2015 08:43

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.

 

 

 

 

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Replying to New To Accountancy:
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By Hannah_J
06th May 2015 10:24

So many

[quote=abelljms]

 

 

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............

 

 

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Replying to New To Accountancy:
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By Hannah_J
06th May 2015 10:29

So many

[quote=abelljms]

 

 

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............

 

 

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Replying to NH:
By petersaxton
06th May 2015 18:11

Background

Hannah_J]</p> <p>[quote=abelljms wrote:

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?

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By Hannah_J
05th May 2015 20:42

Thank you Scalloway.

 

Can i ask why i would gross wage and net wage if i only want to record the liabilities.

 

Thank you

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Scalloway Castle
By scalloway
05th May 2015 20:47

How do you post gross wage

How do you post the gross wages at the moment?

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By Hannah_J
05th May 2015 20:53

Everything was manual before. I have paid the paye/nic for previous tax year, but need to account for them in Sage.

Wages were listed in the cashbook for last year.

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Scalloway Castle
By scalloway
05th May 2015 21:02

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.

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By petersaxton
05th May 2015 21:02

Manual or computer

there's still the underlying entries when you prepare the accounts.

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By Hannah_J
05th May 2015 21:07

Opening Balances will not be available until July. So rather than create a journal, i can just post the liability payment using the correct nominal codes.

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By petersaxton
05th May 2015 21:10

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?

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By Hannah_J
05th May 2015 21:14

I could ask. I know what the opening balances would be as i have the payroll folder.

When posting your Paye/Nic, what do you post to, if you dont mind me asking.

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By petersaxton
05th May 2015 21:18

PAYE & NIC

PAYE & NIC

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By Hannah_J
05th May 2015 21:28

Sorry, that was a daft question. I have a list of n/c and there is two codes for NI -  2211 er/ee and 7007 er. I have just read into it and i guess when making payments from the bank it is 2211 as it contains both and is a cr - liability.

 

Sorry

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Scalloway Castle
By scalloway
05th May 2015 21:32

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.

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By petersaxton
05th May 2015 21:35

Remember what Sage is

It's software that is a tool. You can change the codes to suit the business.

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By Hannah_J
05th May 2015 21:47

I am used to doing everything on paper. Times change i guess. I think i need to create journal entries.

To post the liabilities. So far i have:

 

CR - PAYE 1050.00

CR - ER-EE NI - 1301.11

Now im stuck with the debit side of the journal.

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Scalloway Castle
By scalloway
05th May 2015 21:48

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.

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By petersaxton
05th May 2015 21:52

In the future

the Drs are:

Gross pay

and

Ers NIC

 

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Replying to bettybobbymeggie:
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By Hannah_J
05th May 2015 21:56

Confused me

DR - Gross pay confused me, as it being for liability only.

the Drs are:

Gross pay

and

Ers NIC

 

[/quote]

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By Hannah_J
05th May 2015 21:54

Right, thats what i will do them.

Thank you for your time and patience with me.

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Scalloway Castle
By scalloway
05th May 2015 21:59

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.

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Replying to Alex Falcon Huerta FCCA:
By petersaxton
05th May 2015 22:08

But going forward

scalloway wrote:

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.

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Replying to kevinringer:
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By Hannah_J
06th May 2015 10:08

Hiya,

The journal threw me because the the debit gross wages. Gross wage to me is the whole of all calculations, rather than just the the liability. I am hoping to do a homestudy quick course to get me up to speed. Just need the boss to ok it.

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By Hannah_J
05th May 2015 22:07

Thank you both for your help. I really have appreciated it.

Goodnight.

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By petersaxton
05th May 2015 22:10

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

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By WongR
06th May 2015 11:03

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.

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By Hannah_J
06th May 2015 12:09

Ok, this is what i have created:-

 

2210 - PAYE - CREDIT 697.00

2211 - NI - CREDIT 1301.11

2220 - NET WAGES  DEBIT 1302.22

7006 - EERS NI DEBIT 695.89

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Scalloway Castle
By scalloway
06th May 2015 12:20

What is that Journal for?

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By Hannah_J
06th May 2015 12:31

It is for the P32 paye/nic liability

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By Hannah_J
06th May 2015 12:32

Thinking about it. It should be Debit 7000 - gross wage?

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By Hannah_J
06th May 2015 18:45

AAT?

I have done some manual bookkeeping before. Im a techno phobe- thats my problem.

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Replying to cbp99:
By petersaxton
06th May 2015 19:00

Not a problem with computers

Hannah_J wrote:

AAT?

I have done some manual bookkeeping before. Im a techno phobe- thats my problem.

www.aat.org.uk

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.

 

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By Hannah_J
06th May 2015 20:15

Thank you for the aat information. I will certainly have a look into it. I have got a level 2 book keeping qualification. I obviously need to brush up on it.

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