You would need to post your ERSNIC to somethin like 7001 and your NI Liability account 2211 should be EESNIC like you have got plus your ERSNIC.
Gross pay 7000 1764.71 DR ERSNIC 7001 20.00 DR (As an example only) Net pay 2220 1377.95 CR PAYE 2210 245.00 CR NIC 2211 161.76 CR (141.76 + 20.00) Total 1784.71 1784.71
-- Edited by Rhianrach on Wednesday 2nd of February 2011 08:57:49 PM
Hi Paul SSP is Statutory Sick Pay and SMP is Statutory Maternity Pay.
Looking at Donna's Sage enteries:
I thought SSP and SMP figures should be credits rather than debits when journaling to the ledger as they are recoverable amounts from HMRC and thus reduce PAYE/NI liability to HMRC.
the gross salary figure would contain gross amounts to the person on sick (or maternity) leave.
Apologies shouldnt have posted in such hast while in bed with cold.
you are correct, SSP/SMP are Credits I had broken down into PNL & BS rather than debit / credit
N/C Name Debit Credit 7000 Gross Wages The total of gross wages for all employees. Debit 7006 Employers NI The total employer NI contributions. Debit 2210 PAYE The total PAYE deducted. Credit 2211 National Insurance The total employer and employee NI contributions. Note: If you receive an employee or employer NI rebate, the value should be posted to this nominal code as a debit. Credit 2214 Student Loans If applicable, the total of student loan deductions made. Credit 2215 Attachments If applicable, the total of attachments deducted from employees net pay. Credit 2216 Deductions If applicable, the total of remaining employee deductions, excluding attachments, and student loans. Credit 2220 Net Wages Total net wages, that is the total of employees' take home pay. Credit If your payroll includes pensions you need to post the following two entries: 2230 Pension Fund Total employer and employee pension contributions. Credit 7007 Employers Pensions Total employer pension contributions. Debit If your payroll includes SSP, SMP, SPP or SAP Reclaimed you need to post the following entries: 7010 SSP Reclaimed Total SSP reclaimed. Credit 7011 SMP Reclaimed Total SMP Reclaimed. Credit 7012 SPP Reclaimed Total SPP reclaimed. Credit 7013 SAP Reclaimed Total SAP reclaimed. Credit 2211 National Insurance Total SSP/SMP reclaimed. Debit
__________________
Donna Curling - Complete Book-Keeping Ltd (CBKLtd) - 07939 101900
When i debit the bank account do i breakdown the EE NI and ER NI for payment? Generally I have been making 4 payments from the bank area namely, EE NI, ER NI, PAYE and Net wages. Is this the correct way of doing things?
There are two routes I advise Arithmo users who have asked about journaling payroll to do:
(1) set up a PAYE/ NI balance sheet account.
at point of payroll, CR PAYE/NI account
when you pay HMRC after payroll month, do a journal DR PAYE/NI and Cr Bank.
or
(2) CR Bank PAYE/NI and not use PAYE/NI control account. At end of month when doing the bank rec; leave as unreconsiled item and reconcile the entry next month when you physically pay HMRC (before 22nd of the next month- if paying HMRC electronically).
Hi Donna,
I have been using sage for coming up to a year now but have never needed to deal with SPP until now.
I found your breakdown of all the n/c accounts and debits/credits extremely useful!
on our payroll summary the employee with SPP had a 'discount' from their normal gross wage for the two weeks they were off. Our payroll summary shows us claiming back the SPP they receive and the NI ascociated with it.
So do i need to set up a new N/C i.e. 2216 Deductions for this 'discount' and an 'SPP reclaimed' N/C?
Also when i post the SPP and discount to the relevant N/Cs how do i then clear these? normally the PAYE & NI N/Cs and wages control acc are cleared when i put throught the bank what we paid over to HMRC and the wage payments?
many thanks
Is the "discount" just a deduction from their normal gross SPP or is it something that has to be paid to HMRC? If it is just a deduction from the gross pay then I would just enter the gross figure less the deduction in N/c 7000 Gross wages.
You will need to set up or rename a N/c in the 701x range for the SPP reclaimed. You won't need to clear them as the opposite entries are posted as debits to your PAYE & NI Ctrl account nominal, thus reducing the balance subsequently paid to HMRC.
The SPP journal will be something like this:-
Debits 2210 PAYE & NI Ctrl (SPP recl & NI comp)
Credits 701x SPP reclaimed 701x NI compensation
The amount of SPP itself is included in the gross wage figure as a debit.
Thank you ever so much! Your explaination makes perfect sense.
The deduction was on their normal gross wage to remove 2 x weeks of their normal wage and then in place they received 2 x weeks of SPP. So do you suggest putting their gross wage less the deduction + the total SSP into the gross wage N/C?
I will set up two new N/C for: 701x SPP reclaimed 701x NI compensation
as you have suggested and put the debit sides to the PAYE & NI control.
No problem Kim. Why did you have to remove 2 weeks of their normal wage? Can you not just delete the employee's normal wage and then enter the SPP when you are maintaining the employee's pay for the period? I have used Sage Instant for payroll, so don't know if you are using this or Sage 50?
Hi pauline,
We have our payroll prepared externally then i just put it through sage 50 and pay it using the payroll summary and hmrc remittance from the accountants.
Does that alter your previous advice? Or can I just post the spp as you suggested?
X
Hi pauline,
I have posted the wages as per your instructions, paye and NI accounts and wages control are now showing the corrrect balances.
Really appreciate your help.
Many thanks again!
X x x
btw i do have the 2210 (PAYE/NI) account on the balance sheet and this does seem to be out by the student loans and so assume the above is correct but would like this clarified for peace of mind
Having re-visited the part 1 and part 2 payroll reports for month X, I can see the student loan column....and looking at 2210 rec for month X I can see that the latter is out (compared to what the P32 report said I should pay to HMRC) by the student loan amount. I therefore feel I need to CR 2210 with the student loan amount to reconcile this account....but where do I post the DR ?
-- Edited by Mattyb on Friday 19th of July 2013 05:18:05 PM
This thread has been very useful to myself as well. I am now responsioble for all payroll in my new company role, and , albweit have done the journals before there are always new areas to cover when they crop up. One of these is Student Loans.
Now this is automatically calculated through Sage 50 payroll and deducted from the employee, then when I press the FPS to HMRC the P32 shows me how much to pay to HMRC and this is I do (by 22nd of following month).
My question however is the journals for student loans. This has only cropped up over the last few months and I just don't know where to post them to clear my BS and then post to P&L...am I right ? Is this a dumb question or should they go to something like gross wages ?
Another quick question regards to CAPS (Centralised Attachment of Earnings and Payments System), paying £75 per month from an employees salary. Can you advise of the journal entries for this ?
Final question (hopefully) can you advise on SSP. Looking at the above it mentions 7010 SSP RECLAIMED, firstly how do you go about reclaiming this from HMRC ? How much of the monthly payment can you reclaim ? Until I go ahead and reclaim do I still post to this nominal or should an alternative be used to such time as I do reclaim ? Can you also advise of the journal entries too ?
Many thanks for all your help. I think these forums are fantastic for people to voice their questions and get expert advise
Matt (a very happy bunny now !)
-- Edited by Mattyb on Monday 22nd of July 2013 09:06:31 AM
You will deduct the Attachment like the student loan (so DR net wages) and then you would post the attachment to its own creditor account. (I rename 2211) Then when you pay that money out, to whoever its owed to, the bank payment would DR the CR you posted in 2211
So, £75 for council tax would DR net wages and CR 2211 Then the bank payment to the council would CR bank and DR 2211, clearing it to NIL
I don't know much about payroll, but from my understanding... SSP is calculated, but not all of it can be claimed back. The percentage that can be claimed is used to reduce the liability for the month, so you pay less. If no liability for the month is due, you hold it on account until a liability becomes due. If a liability never becomes due, the P35 shows the money is owed to you and you get a refund.
It is this percentage that needs to go into Sage. DR 2210 and CR SSP reclaimed on the P&L.
-- Edited by FoxAccountancyServices on Monday 22nd of July 2013 09:55:13 AM
Statutory Sick Pay can now only be reclaimed if the total amount of SSP paid in a tax month is greater than 13% of the gross Class 1 NI (Er's and Ee's) liability for that tax month.
If you have employees who earn above the LEL and so qualify for SSP, but are below the threshold for Class1 contributions, it could mean that you have no class 1 contributions due that month and so will be entitled to reclaim all the SSP paid.
I have a question about the SMP reclaimed. There is an extra 3% compensation paid to the employer so the amount reclaimed is slightly larger than the amount paid to the employee. Does anyone know where this extra amount should go in the wages journal?
on our payroll summary the employee with SPP had a 'discount' from their normal gross wage for the two weeks they were off. Our payroll summary shows us claiming back the SPP they receive and the NI ascociated with it.
So do i need to set up a new N/C i.e. 2216 Deductions for this 'discount' and an 'SPP reclaimed' N/C?
Also when i post the SPP and discount to the relevant N/Cs how do i then clear these? normally the PAYE & NI N/Cs and wages control acc are cleared when i put throught the bank what we paid over to HMRC and the wage payments?
many thanks
