Here's how to post your payroll figures if you don't use FreeAgent's payroll.
You need to use journal entries. Here's what they need to be:
You need to know, for each employee, for each pay period (e.g. week, month), their gross pay, PAYE tax deducted, employee's NI deducted, and the amount of salary they'll actually receive - and also the employer's NI you'll pay for that person.
Let's take an example.
Mary earns £2,000 each month, before tax and NI.
For April 2011, her PAYE tax due is £275.20, employee's NI £167.76, which means her net pay, the amount she will actually receive, will be £1,557.04 (2,000 - 275.20 - 167.76).
Her employer will pay £194.71 in employer's NIC.
So the figures to post to FreeAgent, dated the same day as Mary's April payslip, will be:
Journal entries won't appear on the Taxes > PAYE and NI screen, though, so you'll need to check the balance on code 814 to see how much you owe to HM Revenue. To do this, look under Accounting > Trial Balance as at Now.
When you pay Mary her salary, explain that payment as Money Paid to User > Net Salary and Bonuses.
When you pay the PAYE and NI over to HMRC, explain that payment as a Payment of PAYE and NI, which you'll find under the Taxes heading in the Categories list.
If you are deducting pension contributions from your employee's wages, and paying these to the pension provider, you will need to post additional journal entries.
There will also be other entries if you are adding to your employee's contributions.
Re-visiting the above example, let's say that Mary has asked you to deduct £100 from her wages each month, which you pay on her behalf to the pension fund. You also add an extra £50 to that.
The amount to post to code 902 would therefore be £1,457.04, which is the amount Mary will actually receive - £1,557.04 - £100.
You would then credit code 813 Pension Creditor with £100.
For the pension contributions you, as an employer, would pay, post two journal entries: Credit code 813 Pension Creditor, debit code 403 Pensions (or 409 Directors' Staff Pensions for directors), with the amount you will add - in this case £50. These entries should also be dated the same day as Mary's April payslip.
When you pay the pension company the £150, explain that payment with type Other Money Out and reason Pension Creditor.
...and thanks for taking the time to feed back, it's appreciated.
One of our support team will get touch with you as soon as possible.
If you still need some help please contact our support team.
The Swiss-Army tool for Business Boy ScoutsTry FreeAgent for Free