Unit 30 - Stuck !

stevie_vee Registered Posts: 1 New contributor ?
Hey everyone, my first post on here :)
I am doing a home study AAT course, from scratch and have been progressing along really well.

However i have hit a brick wall. After grasping the double entry and dr and cr i then came across the Accounting for Payroll Payments in Chapter 13. Now i am really confused.

four lots of double entries to be made in three main accounts (gross wage, wages expense, PAYE/NIC creditor)

For some reason i cant get my head around this and just wanted to find out if anyone has any other resources on this topic where i can try and get a different perspective and hence a better understanding.

I could try and memorise this but i would of course prefer to try and understand it.

thanks for any help and advise you can offer.



  • crispy
    crispy Registered Posts: 465 Dedicated contributor ? ? ?
    If you can follow the logic of the following made up figures,

    Gross Pay = £ 100, PAYE Tax £ 15, Employee NI £ 5, Employer NI £ 10
    Net Pay = £ 80
    Journals as follows: -

    Dr Wages & NI Expense £ 100
    Cr Wages Control A/c £ 100
    Being Gross Wage

    Dr Wages & NI Expense £ 10
    Cr Wages Control £ 10
    Being Employer's NI

    Dr Wages Control £ 15
    Cr PAYE/NI Liability £ 15
    Being PAYE Income Tax

    Dr Wages Control £ 15
    Cr PAYE/NI Liability £ 15
    Being Total NIC (Employers + Employee)

    Dr Wages Control £ 80
    Cr Bank £ 80
    Being settlement of Net Wages

    Posting the above should reconcile the Wages Control Account, and leave a credit balance of £ 30 on PAYE/NI Account - being the liabilitly owed to HMRC. In the Profit & Loss Account should be recorded the Gross Wage + Employers Ni - being the expense to the business.
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