ho dear lord!!! I have forgotten the double entry for wages!!!!!!

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
<BR>Hi there, you kind soul! Please remind me what happens with gross, net wages, nic, paye etc.! I need the double entries and if possible the dead lines for paying the inland revenue! Infinite thanks!<BR>

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    ho dear lord!!! I have forgotten the double entry for wages!!!!!!

  • System
    System Posts: 100,534 🤖 Admin 🤖
    ho dear lord!!! I have forgotten the double entry for wages!!!!!!

    Good Morning Minerva,<BR>The journal we do is as follows,<BR><BR>Debit Gross Pay<BR>Debit Employers NIC<BR>( We debit all of this to Gross Pay)<BR><BR>Credit Net Pay<BR>Credit Total NIC<BR>Credit PAYE.<BR><BR> When the payments are made the journal will be<BR><BR>Debit Net Pay / Paye/ NIC<BR>Credit Bank<BR><BR>We have a slightly more complicated journal as we split net pay into net pay, CSA, Attachment of Earnings etc.<BR><BR>I always send my Inland Revenue cheque off in time to reach them by 19th of the month. I usually post it on about the 17th.<BR><BR>Hope this has helped.<BR>Regards<BR>Anne
  • System
    System Posts: 100,534 🤖 Admin 🤖
    ho dear lord!!! I have forgotten the double entry for wages!!!!!!

    Many thanks Aine, only could you also clarify what are the "T" accounts involved? I think they are:<BR><BR>wages exp. acc. (for gross pay, net pay and employers' nic)<BR><BR>and then I am lost.............pls help!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    ho dear lord!!! I have forgotten the double entry for wages!!!!!!

    The expense accounts are Gross wages and Employers NIC. We do not separate these accounts and post the total to Gross wages.<BR>The Control accounts are, Net pay, Paye and Total NIC. Some accountants add the two Inland Revenue creditor accounts together but I would not recommend this.<BR>When the payment is made it should reduce the balance in the control accounts to nil, providing there are no issues like interest charged for late payment or interest received for early payment ( which happened to me as they allocated a payment to the wrong period)<BR>The total cost of your payroll is recorded in Gross Pay, and the balance sheet control accounts should always reduce to nil.<BR>Regards
  • System
    System Posts: 100,534 🤖 Admin 🤖
    ho dear lord!!! I have forgotten the double entry for wages!!!!!!

    Many thanks but I am confused by the 'ees NIC, how does the balance on the ttl nic control acc. come to zero if when I pay I only pay 'ers nic?<BR><BR>Thanks
  • System
    System Posts: 100,534 🤖 Admin 🤖
    ho dear lord!!! I have forgotten the double entry for wages!!!!!!

    To give you an example of how it works <BR>Say gross pay is 15000 and employers Nic is 1250. Also let us say that net pay is 11250 and TOTAL Nic ( employers and employees) is 2500 and that Paye is 2500. The journal will look a bit like this:<BR><BR>Account Debit Credit<BR><BR>Gross Pay 15000<BR>Gross Pay (ers Nic) 1250<BR>Net pay 11250<BR>Paye 2500<BR>Total Nic ERS AND EES) 2500 <BR><BR>Total 16250 16250<BR><BR>I am sorry that I have not explained it better.<BR>Aine
  • System
    System Posts: 100,534 🤖 Admin 🤖
    ho dear lord!!! I have forgotten the double entry for wages!!!!!!

    Sorry, the format didn't come out right.<BR>It should say <BR>Debit Gross Pay 15000<BR>Debit Gross Pay( employers Nic) 1250<BR>Total 16250<BR>Credit Net Pay 11250<BR>Credit Paye 2500<BR>Credit Total Nic( employers and employees) 2500<BR>Total 16250<BR><BR>Regards<BR>Aine
  • System
    System Posts: 100,534 🤖 Admin 🤖
    ho dear lord!!! I have forgotten the double entry for wages!!!!!!

    Dear Aine, you have explained it perfectly well, it is just that I am having a thick day! (or at least I hope it is just a day! hahahah)<BR><BR>Many thanks,<BR>Minerva
  • System
    System Posts: 100,534 🤖 Admin 🤖
    ho dear lord!!! I have forgotten the double entry for wages!!!!!!

    Just to confuse things and I know im reading the technician boards, but<BR><BR>for foundation and intermediate stage they say you have to use a wages control account as well, which personally is a waste of time. However I failed a Simulation because I didnt use the control account.<BR><BR>AAT like to use the control account to make sure the journal equals nil (which a journal must be equal otherwise you cant post in sage!!)<BR><BR>I personally use the same as above, using Gross Pay, Net Pay and PAYE and NHI accounts. But I dont use the wages control account (the control account which has all the entries in for gross pay to net pay etc)<BR><BR>I think i might be confusing things, but I failed a Sim because AAT do it different!<BR><BR>

Categories

Privacy Policy