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How to log and pay sole trader salary


#1

Hello,
I imported a bank statement for May which has 2 salary out payments to myself from the business bank account.

After the import, they appear for tagging, and when I tag them one at a time, I am selecting ‘Salary or other drawings’, then I select ‘Proprietor Drawings’, I enter my name for the Recipient and then ‘Save’.

The issue I have is that when I look at the Profit & Loss report for the month of May, it shows the gross profit which is correct, and then underneath it shows a heading ‘Less Expenses’ with a row with code 9998 Suspense Account and the tagged salary, and then the ‘Profit Before Tax’ underneath displays the gross profit minus the salary. This seems incorrect because as a sole trader, should not salary to me simply be part of the gross profit and not an expense?

I feel that I may be incorrectly tagging the salary from the bank statement, and so your advice would be appreciated.

Thank you,
Bharat


#2

Sole trader cannot get salary, it will be drawings. Profit is taxable regardless drawn or not as sole trader


#3

Thank you for clarifying the terminology. I was using the word salary so that the Proprietor drawing was distinguished from any other type such as an expense.

And I believe I have resolve the issue. I had only tagged one of the two ‘Salary’ transactions and the other was appearing in the Suspense Account row which now does not appear.

Thank you again,
Bharat


#4

Only if net profit exceeds personal allowance which for the 2018-19 tax year is £11850


#5

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