How to record a salary journal - ROI only

Common abbreviations used in this article

We use the following common abbreviations in this article:

• USC - Universal Social Charge
• PRSI - Pay Related Social Insurance
• PAYE - Pay As You Earn
• LPT - Local Property Tax

Payroll information required

To post your salary journal you will need the total values for the following items:

• PAYE
• Employee USC contributions
• Employee PRSI contributions
• Total gross pay
• Net pay
• Employee pension contributions
• Deductions
• Employer’s PRSI contributions
• Employer pension contributions, if applicable
• Local property tax deductions, if applicable

Salary journal nominal codes

If you're using the Sage default nominal structure, you should already have some of the following nominal codes. If these codes don't exist, you may need to create them before proceeding.

NOTE: In addition to nominal code 7000, the default nominal structure includes nominal codes 7001 to 7005. These are optional codes that you can use to split your gross wages into subcategories. For simplicity, the examples in this article use nominal code 7000 for gross wages.

Create a nominal code

1. Click Nominal codes then click New.
2. Complete the Nominal Record window as follows:

   N/C	Enter the number for the nominal code you want to create, for example, 2212.
   Name	Enter the name for the new nominal code, for example Universal Social Charge.

3. Click Save then click Close.

NOTE: When you create a new nominal code you must check your Chart of Accounts to ensure this nominal code is included.

Post the salary journal

NOTE: If you use Sage 50 Accounts Plus or Sage 50 Accounts Professional you can use the Memorise and Recall option to create a skeleton salary journal.

1. Click Nominal codes then click Journal entry.
2. Enter a reference and the date for the salary journal, then enter the relevant details on the Nominal Ledger Journals window, for example:
   
   The balance for the whole salary journal must equal zero before you can save.

   N/C	Name	T/C	Debit	Credit
   2210	PAYE or PAYE and Social Welfare Costs depending on your client’s service. Total tax deducted.	T9		Credit
   2211	Other taxes to pay to Revenue Total of employee and employer PRSI contributions.	T9		Credit
   2212	Universal Social Charge The total USC deducted.	T9		Credit
   2216	Local Property Tax (LPT) If applicable, the total value of LPT.	T9		Credit
   2220	Net Wages The total value of the employees’ take home pay.	T9		Credit
   2230	Pension Total employee and employer contributions.	T9		Credit
   7000	Staff or Employee Costs, depending on your client’s service. The gross wages for all employees, not including statutory payments.	T9	Debit
   7006	Employers PRSI Contribution The total employer PRSI contributions.	T9	Debit
   7007	Employer’s Pension Total employer pension contributions.	T9	Debit
   7009	Other Deductions If applicable, the total of remaining employee deductions, excluding attachments and student loans.	T9		Credit

3. Click Save then click Close.

Post bank payments to clear the liabilities

EXAMPLE: In this example, we are posting a bank payment for net wages.

Once the journals have been posted, a liability is created on certain nominal codes. This prepares the way for you to post any required bank payments to represent the money you have paid out and affect your bank balance correctly.

1. Click Bank accounts then click Bank payment.
2. Enter the relevant details on the Bank Payments window, for example:

   Bank	Date	Ref	N/C	Details	Net	T/C	Tax
   Bank nominal code	Transaction date	Reference	Net wages, for example 2220	Wages	Net wages value	T9	0.00

   NOTE: The bank payments to clear the liabilities should always use the non-vatable tax code, T9 by default. This ensures that they do not appear on your VAT Return.

3. Click Save then click Close.

When required, repeat this procedure to post bank payments for PAYE, PRSI, USC and LPT.