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Post Info TOPIC: Help! Payroll Journal including SPP and compensation
shorox


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Help! Payroll Journal including SPP and compensation
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Hi Guys,

I just cant get my head around the journal for a payroll month where I am able to reclaim SPP and Compensation! I have looked at it many times and just cant work it out!

So this is the scenario

Gross Pay 2031.53

SPP 273.56 (Claiming back from HMRC)

Ee'r NI 65.28

SPP Compensation 8.21 (Claiming back from HMRC)

NI 120.85

TAX 170.20

Payroll Liabilities 2079.32 (This includes the SPP paid to employee)

 

I hope that's enough information, can anyone help me out?

 

Thanks in advance



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Stardoe


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Hi there,

Your journal should be as follows:-

Gross pay  2305.09 expense
Er's NI  65.28 expense
PAYE & NI  291.05 
Net wages  2079.32 
PAYE & NI 281.77  
SPP reclaimed  273.56expense
SPP comp  8.21expense
      
   2652.142652.14 

You needed to include the SPP in the Gross wages figure and also credit the separate expense accounts to reduce the amount of payroll expense.  In this case the total amount of PAYE to pay over to HMRC will be 291.05 less 281.77.

Some people may condense this a bit more, but I have separated it all out so that you can see it more clearly.

Hope this makes sense!

Pauline

 

 

 

 

 

 

 

 



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Pauline
shorox


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thank you!!

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shorox


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Posts: 15
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Hi Stardoe,
So I have done the journal suggested and it works great, but I had a thought when doing it. I have created and expense account for the SSP and I have credited it. I have always been told to only debit expense accounts - should it be an income account instead?

Sorry if it seems a silly question and I am sure its correct just want to make sure I understand what I am doing!!

Thanks



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Stardoe


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Posts: 1470
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Hi there,

You are right, expenses accounts are usually debits, but in this case the "expense" of payroll is being reduced by the amount of the SPP reclaimed, so you need to record this as a credit.

Hope this explanation is enough  



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Pauline
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