Creating journal for sole Director PAYE

Support
1

Could anyone please confirm this journal is correct considering I’m getting £1,047.50 salary and paying Employers NI £94.57 for each month?

I’m the sole director of an ltd without any allowances and followed the instructions of the QF tutorial ‘recording payroll’. I’ve turned on the ‘Post Net Wages to Balance Sheet Only’ on advanced settings as tutorial says.

When payment of the salary 1,047.50 is taken from company bank account I will tag it as ‘Salary or other drawings’, and when Employer NIC direct debit is taken by HMRC I will tag it as ‘Tax Payment to HMRC’. So everything will be balanced.

Thanks in advance

Journal
Journal2424×1218 196 KB

2

If there are no other deductions (for pensions, etc.) then yes, that looks right. The “tax payment to HMRC” will offset 2210 and the payment of net wages (to balance sheet only) will offset 2220.

Alternatively if you don’t always intend to take your full net salary every month from the bank account, you could skip 2220 and instead post the credit line for the net wages to your director’s loan account - you’re effectively loaning money to the company which it uses to pay your salary. Any actual cash you later take out would then be tagged as a transfer to (i.e. repayment of) that director’s loan.