Employer Pension Contributions

I wish to record contributions to a directors pension. How do I do this, I know the code is 7007 Employers Pension Contribution which I found under reports/Charts of accounts. But do I record it as a purchase because I can never find this code in any drop down list.
Thank you

It wouldn’t be a purchase, it would be part of the journal you enter when you run your payroll (debit 7007 for the employer’s contribution, credit 2230 for the sum of the employer’s contribution and the employee’s contribution - which comes out of the gross salary). Then when you pay the contributions over to the pension provider that would just be a “something not on the list” tagged to 2230.

Thank you for that concise reply, I think it may have thrown me up more questions than answers. I don’t think I have really grasped the workings of this programme yet having previously used Quicken.

@SJH - just to add to Ian’s post above, you may find the following guide helpful: Recording payroll

Thank you Ian all very helpful

For a limited company, direct employer pension contributions to a director’s pension provider are irrelevant to payroll, salary or NI. Just tag the bank transaction (create it first manually or upload bank data) against the employers pension contribution journal. The pension contribution ‘stays gross’ direct from company to pension provider. Consult and check HMRC or other pension literature regarding limits and rules. It is not a purchase. You can do it via payroll if you prefer but if there is no employee contribution and it is not salary related then why bother?

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Thanks just struggling to understand what tagging does. I have a monthly bank tx to pension provider so have tagged that to 7007
Monthly salary is made up of £xx paid from current a/c plus £x paid from petty cash a/c do I record 2 seperate tranactions, 1 in each account or does a journal entry take care of this. Quicken seemed so much simpler. NI only due on the last month of the financial year under directors scheme

‘Tagging’ a bank entry (not the same as ‘project tag’) is just a shortcut way of getting QF to do the journal entries for you. Every journal debit needs a corresponding journal credit(s) totalling the same amount. Under ‘Bank management’ you should have an account setup for your current a/c and an account for your petty cash. (Treat your petty cash like a bank account). I would enter in ‘bank’ entries under ‘Bank management’ for these then ‘tag’ those entries against the salary account (this should make 4 journal entries; one in petty cash, one in current a/c and two corresponding in the salary account). Look at Reports -> Chart of accounts to check to see what is really going on (use magnifying glass icon). If you want to do the payroll thing, not sure how that fits in so will leave to someone more knowledgeable. Maybe that helps.

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