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Post Info TOPIC: Accruals for staff bonus
Sue P


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Accruals for staff bonus
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Hi, I need to post an accrual as at the year end of 30.4.12 for payment of staff bonuses that were actually paid in June 2012.  The expense needs to be reflected in the previous years accounts ye 30.4.12.  The net wage nominal account balances so how can I post the accrual?  Do I post it to gross wages?  I hope this is not a really silly question!

Any help gratefully received.

Sue



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MarkS


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Hi Sue

Assuming gross is say £10k and ER NIC is £1380 posing would be

Dr Gross Wages (7xxx)    £10,000

Dr ER NIC  (7xxx)             £1,380

Cr Accruals 2109                                   £11,380

You would then reverse in the year to 30 April 2013 in June 2012 when the bonus is paid so the accrual offsets the bonus and ER NIC when processed.

eg

Cr Gross Wages (7xxx)                             £10,000

Cr ER NIC (7xxx)                                        £1,380

Dr Accruals 2109                £11,380

Dr Gross Wages  (7xxx)    £10,000

Dr ER NIC (7xxx)                 £1,380

Cr Bank  (1200)                                     £7,000 (est)

Cr PAYE (2xxx)                                       £2,000 (est)

Cr EE NIC (2xxx)                                    £1,000 (est)

Cr ER NIC (2xxx)                                    £1,380                   

The non-bold journals cancel out leaving the bolded journals.  Effectively you wont have a P&L effect showing in June when you pay the bonus as will have been recognised in April when accrued.

Regards

MarkS



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Mark Stewart CA

http://stewartaccounting.co.uk/

Providing accounting, bookkeeping, payroll and tax services to small and medium sized businesses across Central Scotland and beyond.
Sue P


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Posts: 19
Date:
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Hi Mark

Thank you so much for that reply - I will go in today and post the accruals as you have suggested.  Saved my life! Thanks.

Sue



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