Employers Pension Contribition Journal Entries

Accounting
1

Apologies for (probably) a dumb question.

I have a limited company and use Journaling for payroll which works very well. However we are now paying Employers Pension Contribitions so I duly added these two entries to my monthly journal.

Employers Pension
Employers Pension1002×71 13.8 KB

When I made the payment from our business account I tagged the entry
Employers Pension Bank
Employers Pension Bank1232×42 8.52 KB

However, now I look at the P&L and it shows double the amount it should for Employers Contributions.
Employers Pension PL
Employers Pension PL960×33 4.77 KB

So I’m confused. What have I done wrong? My double entry knowledge is obviously more patchy than I thought!

2

When you made the payment you should have tagged the bank transaction to “Pension fund” (2230) rather than “Employers pensions”.

Your original journal created an expense of £1,000 on 7007 and a liability of £1,000 on 2230, so the bank transaction needs to cancel out the liability, not create another expense.

3

Thanks, I knew I had done something dumb on the double entry…
Much appreciated!

4

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