Wages Journal - Salary Sacrifice Pension

philharibo
philharibo Registered Posts: 1 New contributor 🐸
in Bookkeeping
Hello,

I need to process a wages journal with a salary sacrifice pension scheme for a director.

My question is:
A) should I be journaling Gross Pay before salary sacrifice in the Directors Salary and then recording the ER Pension as less the sacrificed amount.

B) Or vice versa showing the Gross Pay less the sacrificed amount and showing the ER Pension as the full amount

I've journaled it using B before but am now being told that is incorrect. Any help would be appreciated.

Thanks

Comments

  • Caspar1
    Caspar1 Registered Posts: 32 Regular contributor ⭐

    Gross pay after salary sacrifice and all pension contributions are shown as employer contributions.
    So if £1k is sacrificed and gross pay originally £10,000 per month. The journal would reflect £9,000 gross pay, and £1k employers pension (plus of course the 3% the employer puts in too).

Categories

Privacy Policy