A client's accountant has advised that I need to separate out Directors' Remuneration and Employers' NI in the P&L. Can anybody tell me if this can be done in QB and if so, what the best way is to go about it?
When you put the wages journals through, put the Gross Pay to the Directors Pay nominal, and the ER NI to a Directors Employer NI nominal. You may need to set one up if there isn't one already.
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Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
Thank you for answering. Quickbooks does all the journal entries automatically and I guess my question is whether the system can be made to make those separations rather than having to make the journal entries manually.
If you want to track your Director's salary and Employer's NI separately in QB, first of all you need to make sure you have these expense accounts set up in your Chart of Accounts. Depending on how your COA is set up you should already have an expense account entitled Payroll. All gross wages and employer's NI will be posted to this if you haven't separated them out. You will need to create two new expense accounts entitled Director's salary and Employer's NI both as a sub-account of Payroll.
Once you have created these you will then need to open the Payroll Item List (under Lists on the main toolbar) and you should have Director's salary and Employer's NI set up as Items. Click on each one of these in turn and click on Account - Edit. Keep clicking on Next (leaving all other information as it is) until you get to the Expense account tracking window and in the drop down box you can then choose the expense accounts you created earlier. QB will now automatically post to the correct expense accounts when you run your payroll.
Hope this helps. If you are uncertain of anything let me know and I will try and explain in greater detail.
I have set up the Directors' Salaries in this way in the payroll items but got a bit stumped when I got to Employer NI.
I don't know how I can separate out the Employer NI incurred for the Directors from the Employer NI for the staff. As Employer NI is an automatic calculation rather than an item to add in the payroll process, I don't see how the Directors' NI would be tracked seperately...I hope I am making sense.
I don't think you will be able to separate out the Employer's NI suffered on the Director's salary from that of the staff as Employer's NI is Employer's NI whether it be on staff or director's salary. If there is only one Director is will be easy enough just to journal the amount from Employer's NI to a separate account for Director's Employer's NI.
