Usually an employee is paid a net salary after certain taxes/deductions have been taken into consideration. What follows is a suggestion of how you might account for these various components.
As an example, let's assume that an employee gets paid monthly and that the following values apply:
|Amount paid to employee (a)||£1150|
|+ PAYE (b)||£250|
|+ Employee NI contribution (c)||£100|
|= Gross Wage on payslip||£1500|
|+ Employer's NI contribution (d)||£150|
|= Total Salary Cost to Organisation||£1650|
To reflect this in Accountsportal, you need to enter two transactions. Start with a General Payment transaction for the amount paid to the employee, followed by a Journal entry transaction to capture the taxes/deductions and show that they are payable to the HMRC at a later date.
Enter a General Payment transaction transaction as per the instructions in the link above. The following fields need special attention:
Enter a Journal entry to capture the taxes/deductions and show that they are payable to the HMRC at a later date. For more detail on entering journals view the instructions in the link above.
Line Item 1 Enter a Debit amount which raises the taxes as an expense in your books. The amount is the total of all (b) + (c) + (d). Enter this as a single line to the account of your choice (eg. PAYE) or split this line into multiple debit lines to enter each category of tax/deduction against its own account.
Line Item 2 Enter a Credit amount which raises the liability for the amount that needs to be paid to HMRC at a later date. The account to use is PAYE and NIC Payable.
At some point you will need to pay the HMRC the total amount of PAYE and NI due to them. This can also be entered as a General Payment transaction. In the example below, it is assumed that the HMRC is paid monthly for taxes/deductions. If you only pay quarterly, then you should adjust the amounts as required. The entry against the PAYE and NIC Payable account creates a debit entry which offsets the credit amount entered in the journal above.