hi I have just started employing someone and have gone through the Payroll site - when connecting to QF I am asked for nominal codes for Gross Pay, net pay & tax plus a load of optional ones
and whether to show net pay as a total figure or per employee. there will be 3 part time employees 2 of whom are directors
what do I put into these boxes so that I can link it to QF I have no idea this is the first time/new for me- which is why ive gone for the Payroll site as i dont know about journals either you say that can be used to amend anything - so i prefer to get it right at the start.
thank you for any help with this!
For gross staff wages use
7000 Gross Wages
For gross director salaries use
7001 Directors Salaries
For employer Ni
7006 Employers N.I.
For employer pension contribution
7007 Employers Pensions
For Tax and NI (both employee and employer) and pension payable liability use
2210 P.A.Y.E.
for net wages payable use
2220 Net Wages
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Personally I’d split the pension liability into “Pension fund” and leave just the money I owe to HMRC specifically in 2210.
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Thank you that is really helpful, but I cant see anywhere to put in a code for Directors Pay! have I done it correctly? I set it as net pay by employee as I thought directors pay may need to be shown separately, or is it better to have it Total Only? and what do I put in the other blank boxes??
your help has been brilliant! I never realised it was this complicated!
many many thanks
Teresa
hi Ian
Thanks for the suggestion, but what code would pension fund go under? and why is t better to show this separately?
many thanks
teresa
I don’t use The Payroll Site specifically but the codes I use for the equivalent jobs in my paryoll are:
- gross wages 7000
- I don’t have any directors as I’m not a limited company - QuickFile has a separate code 7001 for directors’ gross pay as opposed to general employees, it seems odd that The Payroll Site doesn’t have an option to split this, unless they are expecting you to run the directors pay as a separate payroll altogether rather than including directors in the normal pay cycle
- employer’s NI 7006
- net wages 2220
- tax, NI (employee and employer), student loan and PG loan liability 2210 (essentially this is all and only the things that go into the single monthly payment you make to HMRC)
- pension liability 2230 (what you owe to your pension provider)
I’ve not yet (touch wood) needed to pay any statutory payments for maternity or sick pay but if I did I’d put them into 7010-7013 as appropriate.
I don’t bother splitting the net pay liability out by employee, I just put one lump total into 2220 and the splitting happens on the bank account when I make a separate payment to each employee and tag those as wages (with “post net wages to balance sheet only” turned ON in my settings). I guess if you weren’t using an auto bank feed and you always have it so that your payments to your employees leave your bank account exactly on payday (e.g. if you’re paying by Faster Payments, rather than old-fashioned BACS) then you could skip a step by making it split net pay by employee but then using 1200 (or whatever is the code for your current account) as the net pay nominal code. That way the payroll journal itself would create the individual money out transactions pre-tagged in your bank account statement rather than you having to create them by hand.
You may find you don’t have all these codes on your QuickFile chart of accounts by default - my account was created several years ago when they were all there as defaults and I never got around to removing them, but nowadays I believe the default set is much smaller but there’s an option to add the extras back in.
Hi @Termeek1
You can use default codes within The Payroll Site by clicking the “Set to Defaults” button:
Alternatively, as @ian_roberts and @FaradayKeynes have pointed out, you can use different ones if you wish.
Regarding director’s pay, if you edit an employee, you can set a custom nominal code there under the “Tax Details” tab:
Hi Mathew,
thanks for this and explaining how to set the directors pay. it was very helpful.
I have another question. one director is paid for massage sessions he delivers, last year he invoiced and was paid by invoice, we were advised that he should be on payroll, he has delivered a number of sessions this year but not invoiced, so I wanted to put all the sessions delivered on to the pay roll. if i put the total of the last 5 months into one pay run how would i set it out? he will have delivered around 2 sessions a month at different projects earning between 150 and 270 a month from these sessions.
I am worried that if i put it all into one payment it will trigger other liabilities. should i get him to invoice up to sept and go from there or is there a way to put it into the payroll site so it will be accounted for in the correct months?
thanks
I think the best people to speak to about this is your accountant and/or The Payroll Site directly.
thanks Mathew I just did and they were very helpful.
are there any accountants on your list that know about Community Interest Companies year end requirements? I would only need an independent inspection.
thanks Ian
this is really helpful, it all seems a bit of a minefield at the moment with setting up , but hopefully it will become easier once all this is done. we do use the bank feed, I will have to look out for the settings for post net wages to balance sheet. so I am not sure if I need to do what you wrote in your post - not too sure I understood that bit either.
“I guess if you weren’t using an auto bank feed and you always have it so that your payments to your employees leave your bank account exactly on payday (e.g. if you’re paying by Faster Payments, rather than old-fashioned BACS) then you could skip a step by making it split net pay by employee but then using 1200 (or whatever is the code for your current account) as the net pay nominal code. That way the payroll journal itself would create the individual money out transactions pre-tagged in your bank account statement rather than you having to create them by hand.”
thanks for your support
Ignore that bit if you’re using a bank feed. The “post net wages to balance sheet only” option is in account settings -> advanced features and needs to be turned ON if you’ve set up the payroll site to put net wages on 2220.
Thanks again Ian, I have turned on that setting. many thanks for the ongoing help.
