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Recharging Salary to Directors Loan Account

Correct double entry

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Hi All, 

Please can you help with the best way to recharge a percentage of a specific member of staffs salary into the directors loan account.

The director agreed to pay a portion of this empoyees salary through money owed to them from the company for the foreseeable future as the salary was out of budget.

Please can you assist in the best way to reflect this on a monthly basis?

 

Kind Regards,

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By Duggimon
27th Feb 2020 11:44

Is the director personally paying the salaries of the staff, or is he making additional payments to the staff above their normal salary? Is the director going to be reimbursed for these payments at some point in the future?

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RLI
By lionofludesch
27th Feb 2020 12:41

I'm reading this as the director agreeing to stand the cost, in part, of a legitimately engaged employee.

1. Work out the full cost of the employee. Gross Wage, employer's NI, employer's pension, cost to the company of benefits, anything else.

2. Apply the percentage.

3. Dr Director's loan, Cr Wages.

I wouldn't be going through this process every payday. Once a year would be grand for me.

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Replying to lionofludesch:
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By Sandnickel
27th Feb 2020 13:42

Agree with this.

lionofludesch wrote:

I wouldn't be going through this process every payday. Once a year would be grand for me.

Unless of course you are making monthly reports and reconciling with budgets then you would need to do this every payday.

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