PAYE/NIC Postings in Sage - The Book-keepers Forum (UK)

AnitaP · Veteran Member

PAYE/NIC Postings in Sage

RobH · Expert

Hi Anita,
I personally lump both PAYE and NI together under 2210 (though you can separate between 2210 and 2211). If you are posting from the bank statement, just go to 'Bank Payments' and post to the 2210 using T9. If you are journaling then:

Dr 2210 £434.05
Cr 1200 £434.05

PAYE/NI Month 8

I'm assuming you would have put the salary journals on to so the '2210' account gets netted off?

Cheshire · Master Book-keeper

Hi Anita
As you know this was the subject of another (very long) posting recently. We can advise how to show the Bank payment but that would leave your liabilities accounts not reflecting the correct position as they would not be showing the original entries. You were to get the breakdown of how these figures were arrived at so that we could explain all the double entries required for the payroll, including the gross and net paid to staff.

Are you unable to get this breakdown?

Cheshire · Master Book-keeper

Hi Rob
Our posts crossed!

I think I suggested a while ago that Anita doesnt journal in case her sage version doesnt include journals in Bank recs. Most of the newer ones do these days, so this one should, but I thought there had been an issue with an entry causing an imbalance which had been a journal. I do know a couple of people had raised this recently so it might not have been Anita.

Cheshire · Master Book-keeper

Hi Anita
Given the earlier posting thought it might help to include a worked example. NB The figures used are random!

Situation
Staff gets wages of £2000 pm (ie the gross figure/pre deductions)
Tax deducted £223.00 and EmployEES NI deducted £159.36
= Net pay (the amount paid) to the employee is £1617.64

Company also has EmployERS NI on the above wages to be paid of £182.71.
(I have assumed they arent claiming the NI allowance)

So Total Tax to be paid to HMRC £223.00, total NI to be paid to HMRC £342.07 (overall total £565.07)

So for the accounts to be complete, you need to show the expense to the business of the Gross wages and EmployERS NI. Plus show the liabilities to the HMRC of all tax/NI due and the staff wages to be paid, until of course these are paid.

Entries to show expenses and liabilities are done in sage via journals as follows - All entries above are coded as T9, outside the scope of VAT.
Dr wages expenses (P&L) with gross figure ie £2000.00 nominal code 700x
Dr NIC EmployERS (P&L) with NIC EmployERS only amount £182.71 nominal code 701x
Cr Net Wages (balance sheet) gross minus deductions ie the take home pay £2000 tax £223.00 -EEs NI £159.36 = £1617.64 Nominal code 2220
Cr PAYE (balance sheet) with amount due to be paid to HMRC £565.07
(You can split this PAYE tax 2210 and all NICs 2211 more helpful for analysis)

Then when you come to pay the employee Enter this as Rob says via Bank payment and code it T9.
Dr net wages nominal code 2220 (this will clear the balance sheet liability) £1617.64.
Cr Bank

When paying HMRC Again key as a Bank payment and code it T9.
DR Tax/NIC control - PAYE 2210 ( or 2210 and 2211 depending on how you keyed the liability above)
CR Bank.

I find it helpful to add the month info eg M11 March 2016 to the entries in the event you have an imbalance it might make it easier to locate.

Note once you have paid all wages the 2220 account will revert to nil, so its a good sense check. If there is a balance in there - check it out as you may have forgotten to key something, or keyed it incorrectly. Also the PAYE/NI accounts will if they keep up to date with their payments.

I suggest you take a backup before you key all the entries.

I also suggest you have a go at keying all entries in your practice data, do the journals then stop and look at your TB, then key the payments to the employee and again look to see what is impacted each time. Helps to learn it and understand it. Plus maybe dropping the entries into T accounts.

Hope that helps