Tagging directors salary

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1

When I tag a directors salary from the bank as PAYE / salaries, do I need to tick the box “tick if director”? what if I don’t tick this and just journal directors and employee salaries together to gross wages?

Rob

2

Hi @Rob

Ticking the box uses the 7001 Director Wages/Salaries nominal rather than 7000 gross wages, but it would depend on whether the “post wages to balance sheet” option is turned on or off in advanced settings.

As long as the ending result is showing it as the 7001 nominal on your P&L, then it should be fine. However, as always with things like this, I’d recommend checking with your account to be sure

3

I have been tagging all wages for employees and directors the same without ticking the directors box therefore tagging both to 7003 net staff salaries paid, I then create the journals to move to gross wages.

Is it necessary to treat directors differently to employees i.e. tag directors salaries to 7001 before journaling to 7000 gross wages? if so could you confirm the reason for this?

Many thanks

Rob

4

It comes down to how you file your payroll RTIs. Director salaries usually need to be differentiated as they pay a different rate of NI to regular employees. Your accountant (or whoever manages your payroll) should be able to shed a bit more light on this.

5

Hi Glenn

I am aware of this, we use BrightPay at the moment and the directors details are set up correctly within this, it was just how we log the salary within Quickfile that I was unsure about.

If I tagged the Directors salaries to 7001 and then journal to 7000, where would the record be that this was a Directors salary initially before being moved to gross wages?

Thanks for your help

Rob

6

Glenn

I can see the record would sit within the 7001 nominal entries, if I took this method, would I need to journal to gross wages 7000 as I do with the employee wages?

Rob

7

I believe so but I would check with your accountant on this one, I’m not an accountant so I can’t give you a categorical answer on this I’m afraid. Our own accountant did produce some working payroll examples you can find here if that helps:

Payroll Journals Example

8

Thanks Glenn

Joe’s examples have been a great help in the past.

Rob

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