PAYE hit P/L

[Newbie22]

Hello there..

In regards to employee's wages etc... does the tax and NI become a liability on the balance sheet? But the gross wages and overtime hit profit and loss?

Me is like so confused!

 

[elaine@cheapaccounting]

entries

debit wages with the gross and employers NI

credit bank new
credit paye control accounts (tax plus NI ees and ers)

Pay PAYE

debit PAYE control
credit bank

simples

 

[Newbie22]

so paye and NIC sits in the Wages Control Account which is a liability in the balance sheet? is that right or am i going cross eyed?

 

[elaine@cheapaccounting]

until paid yes

 

[Tom McClelland]

so paye and NIC sits in the Wages Control Account which is a liability in the balance sheet? is that right or am i going cross eyed?

Usually I'd recommend an HMRC control account for that.

My standard payroll journal would be:

DR Gross Wages Expense
DR Employers NI Expense
CR HMRC Liability (PAYE+NI+EmployersNI)
CR Net Wages Liability

Then when you pay the employees:

CR Bank
DR Net Wages (usually returning it to zero)

And when you pay HMRC

CR Bank
DR HMRC Control (usually eturning it to zero)

 

[elaine@cheapaccounting]

entries

debit wages with the gross and employers NI

credit bank new
credit paye control accounts (tax plus NI ees and ers)

Pay PAYE

debit PAYE control
credit bank

simples

should of course read

debit wages with the gross and employers NI

credit bank net paid
credit paye control accounts (tax plus NI ees and ers)

Pay PAYE

debit PAYE control
credit bank