Payroll - gulp!

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Can anybody help me with double entry for payroll. I can't get to grips which what should be Dr and what should be Cr?!

Thanks! :shock:

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Payroll - gulp!

    For paying someone their salary it is Cr Bank Dr emp'ee, when you add in dedns they are credits as are liabilities from the moment you take them from the emp'ee. Does that make sense?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Payroll - gulp!

    Hi Nikkala

    If you are putting your payroll journal through you need to:

    DR Gross Wages (P&L)
    DR ER NI (P&L)
    CR PAYE (BS)
    CR NI EE & ER (BS)
    CR Net Wages (BS)

    When you pay the employee you will:

    CR Bank (BS)
    DR Net wages (BS)

    When you pay the Inland Revenue you:

    CR Bank (BS)
    DR PAYE (BS)
    DR NI EE & ER (BS)

    Therefore clearing your balance sheet codes to nil, as they are just control accounts and your costs will be showing in your P & L

    Sue

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