Solution Properties
Solution ID:
222001000101695
Last Modified Date:
Wed Apr 09 10:24:40 UTC 2025
Taxonomy Path:
Case category//How do I...
Author:
[email protected]
Integrate Payroll with Accounting
Description

Subscribing to both Sage Accounting and Payroll saves time when you pay employees. You can post:

  • A salary journal including the employee net pay payment
  • A journal for your HMRC payment details
  • A pension payment journal including the payment to you pension provider

 NOTE: You must register Payroll and Accounting with the same email address to link them.  

 CAUTION: If you use Bank Feeds, the bank payments will also import from your bank. To make sure you don't duplicate these payments, make sure you match or delete them from your bank feeds import. 

Cause
Resolution

If you want to watch a video that explains how to set up the integration with Accounting, select play below:

How to set up Payroll integration with Accounting

By default the ingetration is already enabled, but you may want to check the settings related to this. 

▼Steps to enable integration for Accounting
  1. Open Accounting.
  2. From Settings, select Apps and Connections.
  3. Select Sage Payroll.
  4. Select Enable Journals from Payroll.
  5. From the drop-down box, select your Default Payroll Bank Account.
  6. Choose whether to record your net wages as a bank payment or a liability.
  7. Select Save.
▼Steps to enable integration for Accounting Start
  1. From More, select Apps & Connections.
  2. Select Sage Payroll.
  3. Select Enable Journals from Payroll.
  4. Choose the Default Payroll Bank Account.
  5. Choose whether to record your net wages as a bank payment or as a liability.
  6. Select Save to enable the integration settings.

How the integration with Accounting works

Once you set it up, you can make three types of postings.

1. Salary details

Salary Journals

Sage Payroll automatically creates a journal in Accounting every time you complete a pay run in Payroll. It posts with the date you’ve used for your pay date when processing the pay run.

The journal uses the default ledger accounts set up in Accounting.

If you want to record the journals using your own ledger accounts, you need to create manual journals instead. You may also want to do this if you require more detailed reporting. For a list of the journals posted, read What's posted to Accounting when integrated with Payroll.

Net wage payment

Sage Payroll records the value of your net wages in two different ways. You can record it as a bank payment or as a liability.

▼Record your net wages as a bank payment

As you'll actually be paying money to your employees, you can save time by recording this bank payment automatically. This line of the journal will post to the bank account chosen when you enabled Payroll integration.

Use this when you pay all your employees from the same bank account. It shows as a single payment, rather than as individual amounts to your employees.

▼Record your net wages as a liability

You may not want to automate recording the bank payment and post this at a later date. Sage will instead record the total net wages against the Net Wages ledger account. Do this by choosing Post employee net wages to liability account when enabling Payroll integration.

When you make the real life payment, manually enter these details into Accounting.

2. HMRC payment details

When all pay runs are complete for your reporting period (monthly or quarterly), you can record your payment details to HMRC. You complete this using Record payment/ EPS. 

▼How to record
  1. Select Summary from the menu bar.
  2. Under EPS submission, select Action. 
  3. Select Record payment/ EPS.
  4. Check the Record amount paid to HMRC is correct. This is what posts to Accounting.
  5. Enter a Payment date. This is the date the journals and payment will use.
  6. Continue with the rest of the EPS process.
HMRC journals

Accounting creates a journal using the default ledger accounts set up in Accounting.

If you want to record the journal using your own ledger accounts, you need to create a manual journal instead. You may also want to do this if you require more detailed reporting. For a list of the journals posted, read What's posted to Accounting when integrated with Payroll.

HMRC liability payment

The journal includes the amount you owe HMRC as a payment from your bank.

This uses the same bank account where your net wages post to. You choose which account to use when enabling Payroll integration.

3. Pension payment details

To help you keep track of your pension payments, you can record the total amount of pension contributions. You can do this after processing the pay run by using Review Contributions & Record Payments.

▼How to record
  1. Select Pensions.
  2. Select Review contributions & record payments.
     NOTE:     This option will be available for each pension scheme you have set up.
  3.  Check the Record amount to pay to Pension Provider amount is correct and select the Payment date. This is what posts to Accounting.
  4. Select Record Payment.
Pension journals

Accounting creates a journal using the default ledger accounts set up in Accounting.

If you want to record the journal using your own ledger accounts, you need to create a manual journal instead. You may also want to do this if you require more detailed reporting. For a list of the journals posted, read What's posted to Accounting when integrated with Payroll.

Pension payment

The journal includes the amount you owe the pension provider as a payment from your bank.

This uses the same bank account where your net wages post to. You choose which account to use when enabling Payroll integration.

You'll need to repeat this process for every pension scheme you have set up.  

Steps to duplicate
Related Solutions

Salary Journals

Manual payroll salary journals overview