Directors Salaries do I need to Journal them?

from this helpfull thread:
I understand how to enter Journals for salaries so thank you for that very much.
My question is, when I tag a net director payment do I need to enter journals for it too?

So I tag a NET director salary paid from bank followed by ‘Salary, dividend or other drawings’ and tick a “Tick if director” checkbox.

Than it goes to nominal account (7001) Directors Salaries

Than do I need to enter journals monthly as in the instruction above to move NET director salary to Gross wages?

Net salary should be tagged to net salary payable account.

So i should tag net director salary to (7003) NET Staff Salaries Paid?

Than what is (7001) Directors Salaries for?

you shoudl tag diretor and other Net salaries actually paid from bank to 2220Net Wages (balance sheet account). P&L accounts 7001Directors Salaries & 7002 are for recording gross paye journals

How do I tag to 2220 Net Wages from bank account?
Is there anywhere a complete instructions on how to do the Payroll tagging and journals in QuickFile?
For example I didn’t had any clue that I need to tag actually paid salaries from the bank to 2220 Net Wages.
I taged this transactions as Salary, dividend or other drawings-> Employee Salary(PAYEE)
and it automatically put it in the (7003) NET Staff Salaries Paid.
So this is not correct?

Anyone can help me to understand this?

When you are at bank screen, tag money out for net salary as Something else not on this list and then pick Net Wages from drown down list of post to account

You should have credit in net wages from paye journal which would become nil after tagging net salary from bank

Ok, can you also explain why Joe in the above example write this:

    Lets take an example of a payroll report processed through payroll software:
    Gross wages = £1000.00
    Employers NIC = £49.50
    Employees NIC = £42.36
    Tax = £42.60

NET WAGES = £915.04 (tagged directly from the bank to ‘NET Staff Salaries Paid’:

    a. Tag Net Salaries Paid:
    Click ‘Tag Me!’ next to this item, followed by ‘Salary, dividend or other drawings’, enter the 'Recipient’s Name’and click ‘Save’. .

In this example £915.04 is the money that is actually paid out from bank to employee, but he tag it to (7003) NET Staff Salaries Paid but not to (2220) Net Wages

Thats probably old post , 7003 is P7L accounts , tagging net wages to it will duplicate salary figure in P&L. Initially it was not possible to tag transaction to 2220 accounts, now it is after update in QF software

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Hmmm thanks for reply.

I would really like to hear a comment from the developers (Joe) weather their own old instructions are correct or not.

By default when you select this option QF will actually tag the balance to Net Wages (2220) and then simultaneously move that to the P&L account Net Wages Paid (7003/7001). Drill down on these codes from your chart of accounts and you will see this movement.

This method moves any net wages straight to your P&L. But it always goes via 2200.

Are you running separate Payroll Software? If you are then this will already handle that movement in the journals you export from the Payroll software. If this is the case you can go into your account settings (Advanced Features) and tell QuickFile to leave that amount in 2220 and not to journal it to 7003 (or 7001 in the case of directors).

@FaradayKeynes is correct this feature was added only a few months ago.

Thanks for reply Glenn,
I found out eventually that it moves net wages from 2220 to 7003 and 7001 automatically.
Yes I run separate payroll software (Brightpay).

Could you please guide me a bit further.
So I tagged net wages paid from bank account through:
Salary, dividend or other drawings-> Employee Salary(PAYEE)
Salary, dividend or other drawings-> Employee Salary(PAYEE) director

It moved net wages from 2220 to 7003 and 7001.

I also tagged PAYE from bank account to P.A.Y.E. (2210) as per Joe instructions.

What is next?
Do I next need to create journals for each payroll month as it is described in the Joe thread?

And move salaries from 7003 and 7001 and E’ee NI from 2210 to Gross Wages (7000) and E’er NI to Employers N.I.(7006)? All in one journal each payroll month as it is instructed in Joe instructions?

Would really appreciate if you could confirm it.

Unlike @Joe, I’m not an accountant so I can’t provide you with a conclusive answer here. I did scan through Joe’s post and from what you’ve mentioned it seems that you just need to add the Payroll journal to balance things out. This moves the net wages from 7001 & 7003 to gross wages (7000) with the addition of any other components to cover PAYE and NIC to the 2210 account (balance sheet). When you then tag your payment to HMRC from the bank it will then reverse that 2210 posting.

Here is sample journal for the month for director salary

Make sure you have post net wages to balance sheet enabled, then tag net salary to 2220 and paye to 2210

if net wages and paye for the month are fully paid then both account should have zero balance after payroll journal and bank tagging for the month

Thank you so much @FaradayKeynes I now have understanding of this process.
Can you take a look at the journal for the month for employee salary below:

Did I made it correctly?

It is basically the same as for director but instead of 7001 we move to 7000 for Employee salary correct?
7001 for gross directors salarys
7000 for gross Emplyees salary

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That journal looks fine

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