I have a small company and I would like to know how I would enter a wage payment for myself using Sage. The monthly earning I'm trying to post is £130.00. I was going to setup a supplier account in my name and post the payment via the supplier account but that does not seem right as I'm not a supplier. The other option I thought of was posting the amount as a journal by going into company - journals - using account number 7004 (gross wages) and posting as a debit, but the issue I have, my earnings for the financial year is below £3000.00 and the company earned less than £9000.00 so I don't think there will be any tax or national insurance to be paid. If this is correct I'm not sure if I should post as a journal. I will be very grateful if someone can advise me of the correct procedure and how I can allocate the payment.
assuming you shouldn't be taxing yourself (depends on whether you have another job, pension etc) then you would just debit wages (700X) and credit net wages (2220) or if you haven't taken the money you could credit your directors loan account.
Thank you for your reply. I'm very grateful. I do not have another job, pension or any other money coming in. Some months go past and I can't pay myself. My earnings are below the taxable threshold which exempts me from paying tax. If I understand it right, do I debit gross wages or the regular wages nominal code for £130 and credit nominal code 2220 net wages?
Should the entry be done via company - journals? There are four nominal codes to choose from which are directors salaries, gross wages, regular wages and staff wages. Since I'm the director would it be best to use the nominal code for directors salaries?
do the journal as you say, debit director salaries and credit net pay. This will show as an expense in your P&L and a creditor on the Balance sheet. When you pay yourself the entries will be debit net wages (Thus clearing the Balance Sheet) and crediting the bank.
I forgot to say that I have already paid myself and the money has left the bank account. Will the entry still be the same? dr directors salaries, cr net wages.
yes, if you have made the payments in Sage the postings will already have happened, check this by looking at the net wages account and it should show a debit. Once you put your wages journals through, it will clear it out.
I seem to be a little confused. What I understand so far is that there should be 2 sets of entries which should look as follow's,
dr directors salaries £130 and cr net wages £130
cr bank account £130
dr net wages £130.
Will I need to manually enter the credit to the bank and debit net wages or does this happen automatically after I post the entry dr directors salaries £130 and cr net wages £130
You will need to manually enter a bank payment - Bank module - Payment - and enter £130 to nominal code 2220 net wages. This will credit the bank account and debit the net wages, thus clearing down the liability of the net wages to zero.
