As sole traders are self employed they do not have an employer to make pension contributions on their behalf. Therefore, as a sole trader any pension contributions you make into you own pension, will effectively be treated as Drawings, the business is unable to make the contributions for you.
Employer’s Only Pension Contribution:
If as a sole trader you employ other individuals and pay employer pension contributions on their behalf, the contributions will be treated as a business expense, therefore you will need to enter a journal to process the entries, you can access the journal system from Reports >> Journals in the top navigation menu. Now click the button ‘New Journal Entry’.
Here is an example of how to complete the Journal for the pension contribution:
Payment to Pension Company:
When you make the payment to the pension company, tag as follows:
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Once the payment to the pension company is showing on your Bank Statement in QuickFile, whether entered manually, imported or through bank feeds, click ‘Tag Me!’ to tag the payment:
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Now select ‘Something else not on this list’
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Enter ‘Pension Fund’ for the 'Post to Nominal and a brief description, this could be the month the payment relates to:
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Finally, click ‘Save’ to save the journal entry.
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Repeat the above process for all other payments to the pension company, you can also automate the process by checking the box ‘Create a rule to process matching transactions in the same way’
When the payment has been made to the pension company, the balance on liability nominal code ‘2230: Pension Fund’ will be zero.