Payroll

vivfry84

Can I just check I am doing the journals right for payroll

DEBIT
Cost of payroll (gross wages/ employers NI/ employers pensions contribution )

CREDIT
Net wage
Paye/Ni ee and er
Ees pension.

The pension is paid in one lump sum from the company for the eer and ee behalf so will I need to then

DEBIT
ees pensions

CREDIT
cost of sales.

The company have always combined
the gross wages/ pensions and eer
pensions Within cost of sales.

I've only been with the company a few
months and taking over from someone else.
Thanks for your help

CeeJaySix

I assume your list of credits are all control accounts on the balance sheet. In which case looks okay to that point.

When payments are made (pensions or otherwise) you then credit bank, debit the control accounts.

Not sure where you cost of sales entry is coming from above. If you want to disclose the payroll costs in cost of sales (which may or may not be correct depending on the circumstances) I would do this as part of the year-end accounts prep, keep the entries separate in your bookkeeping.

vivfry84

Thanks for the help it was meant to say cost of payroll. Not sure why I wrote cost of sales.

CeeJaySix

There should be no credit back to costs of payroll, unless you have posted both the gross pay AND the payment for 'ee's pension contributions there. To avoid confusion, entries should be:

Run payroll:

dr gross wages (P&L)
cr net wage control, PAYE & NIC control (PAYE plus 'ee NICs), pension control ('ee pension contribution)

dr 'er NICs (P&L)
cr PAYE & NIC control

dr 'er pensions (P&L)
cr pension control


Make payment to 'ees:

dr wages control
cr bank

Make payment to pension:

dr pension control (both 'ee and 'er contributions are in here from above journals)
cr bank

Make payment to HMRC:

dr PAYE & NIC control
cr bank