Correct double entry of cycle to work scheme

cycle to work journal entry

Didn't find your answer?

Please may I ask for your help.  We receive an invoice for a cycle to work scheme that is deducted via payroll.  So the invoice is debited to a cycle to work creditor balance sheet code.  The amount is taken each month from employee's salary. This has to date been posted as a Cr cycle to work creditor. Via the payroll journal, we have been reducing their gross pay, so the amount going to gross salary P&L code is reduced by this cycle to work amount. So say someone is on £3000 gross & the cycle to work monthly amount is £25/mth.  The amount coded to gross salary P&L is £2975. Someone help, I have lost track of the double entry here.

Replies (3)

Please login or register to join the discussion.

stonks
By WinterDragon
13th Jun 2024 15:04

From an employer's perspective the gross pay is still £3,000. It's only for the employee's tax that the deduction comes out of their gross taxable pay.

Payroll Journal would be

Dr Staff wages £3,000
Cr Cycle scheme £25
Cr Net pay/PAYE £2,975

Source: This was the first journal I had to work out as a trainee that immediately bought a racing bike!

Thanks (2)
avatar
By paulwakefield1
14th Jun 2024 08:53

Don't forget the VAT

Thanks (0)