Create manual salary journals

Solution Properties

Solution ID:

240710073105110

Last Modified Date:

Tue Aug 13 13:46:52 UTC 2024

Taxonomy Path:

Case category//How do I...//processing

Author:

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Create manual salary journals

Description

When you create the salary journal, you'll record details of your payroll, net wages, and money owed to HMRC for tax and insurance. Record these as liabilities on your balance sheet to show money owed by your business. Enter these as a Credit in your payroll journal.

The other half of the payroll journal records the costs to your business. These appear on the profit and loss report and you enter these as a Debit value.

Your liability clears when you record bank payments to pay your employees and HMRC.

Cause

Resolution

From Adjustments, choose Journals. Select New Journal.
Enter the pay date for the relevant pay period.
Enter a reference and if required a description.
Enter the relevant amounts as debits and credits as shown in the tables below. The total value of your Debits will match the value of your Credits.
Make sure you clear the Include on VAT return checkbox.
Select Save.

The following table shows an example of a salary journal:

Code	Ledger Account	Description	Debit	Credit
2210	PAYE to pay to HMRC	This is the total tax deducted. If due for a tax refund, record this as a debit.		Credit
2220	NIC to pay to HMRC	The total of employee and employer National Insurance Contributions (NIC). If you’re due an NI refund, post the value as a debit.		Credit
2230	Student Loan	This is the total value of student loan deductions made.		Credit
2240	Attachments	This is the total value of attachments deducted from employees’ net pay.		Credit
4900	Other Income	If you have an employee with an attachment of earnings order, you can take up to £1.00 from your employee’s earnings towards your administrative costs.		Credit
2250	Net Wages	The total value of the employees take home pay.		Credit
2260	Pension	The total employee and employer pension contributions. If you use more than one pension scheme, separate entries show for each scheme.		Credit
7000	Employee Wages and Salaries	Total gross wages for all employees, not including statutory payments.	Debit
7020	Employers NI	The total employer NI contributions.	Debit
7030	Employer Pensions	Total employer pension contributions.	Debit
7050	Other Deductions	Total of any remaining employee deductions, excluding attachments and student loans.		Credit
7060	Statutory Sick Pay	Total Statutory Sick Pay (SSP) paid.	Debit
7070	Statutory Maternity Pay	Total Statutory Maternity Pay (SMP) paid.	Debit
7080	Statutory Paternity Pay	Total Statutory Paternity Pay (SPP) paid.	Debit
7090	Statutory Adoption Pay	Total Statutory Adoption Pay (SAP) paid.	Debit

Reclaim statutory payments

If you can reclaim any statutory payments such as SMP, SSP or SAP, include the following lines:

Ledger Account code	Ledger Account	Description	Debit	Credit
7070	Statutory Maternity Pay	The total SMP reclaimed.		Credit
7080	Statutory Paternity Pay	The total SPP reclaimed.		Credit
7090	Statutory Adoption Pay	The total SAP reclaimed.		Credit
2220	NIC to pay to HMRC	The total of all statutory payments reclaimed this period.	Debit

Reclaim Employment Allowance

If you claim employment allowance, include the following lines:

Ledger Account code	Ledger Account	Description	Debit	Credit
2220	NIC to pay to HMRC	The amount of employment allowance you want to claim.	Debit
7020	Employers NI	The amount of employment allowance you want to claim.		Credit

Steps to duplicate

Related Solutions

Manual payroll salary journals overview