Recording wages in Tas Books Basic Free

[frostedlemon]

We are using TAS Books Basic free edition for our accounts, and the hmrc 2010 employer cd rom for payroll.

The issue we have is how do we account for wages paid to employees in TAS?

[David Richards]

You an account for wage costs by posting journals. You always do this in two parts; one part to record your costs and one part to record the payments.

It might be clearer if I give you an example (with obviously made-up figures!).

You pay an employee £1,000. You have to pay £100 employer's NI and you have to deduct £200 tax and £100 employee's NI. So your total costs are £1,100 and you have pay your employee £700 net - the PAYE and NI goes to HMRC.

In Basics, click on Accountants > Journals/Adjustments on the menu bar. Enter the date, a reference (e.g. WAGES) and a note.

5000 Staff Salaries Debit £1,000
5020 Staff Employer's NIC Debit £100
2400 PAYE & NI Payable Credit £400
2410 Staff Wages Payable (Net) Credit £700

The costs are now correctly recorded and amounts now show as a liability - amounts you owe but have not yet paid.

When you actually pay your employee, you just record a payment from the bank account using analysis code 2410 - making sure you select it as VAT rate 5 (outside scope). And when you pay the PAYE and NI to HMRC, you just record a bank payment to account 2400 - again outside scope for VAT.

[frostedlemon]

Thank you David, super quick response :)