Net Pay imported into Accounts

Question asked by Kali Murrell 3 years ago

I need to provide salary figures for an employee's re-mortgage, but was surprised when I ran a transactions report to see that net pay was imported into accounts. I'm not an accountant, but wouldn't that mean that our salary figure is understated? Surely that makes a difference for not only corporation tax but profit available for dividend. Is the rest in PAYE? It's rather misleading.

Personally I would prefer to see gross salary/bonus and then PAYE only showing employer's contributions. Any PAYE deductions should be posted to a HMRC PAYE balance sheet account that gets cleared out following month as payments made. (This may already happen--as I said, I am not an accountant.)

I guess my other concern is that some setting isn't right for the interaction between the Payroll and Accounting modules. We only took on payroll processing last year, and I don't know enough to be able to easily spot an incorrect setting. (Advice, please?)

Thanks, Kali

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Hi Kali,

Yes, the imported payroll will split this into net pay, PAYE, NI and any other deductions. This will not affect the Corporation tax or profit available for dividend as total of the net pay + deductions = gross pay (total expenditure paid by the employer).

The method you have proposed is an alternative that we currently do not support. You can use this alternative method but would have to manually journal this in the accounting module.

Tommy

Best answer
3 years ago

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