In order to reflect the true financial situation you may wish to create Wages Control Accounts to hold your liability to HMRC for PAYE and NI until they are paid.
In our example we have a WEEKLY wage bill of approx. £900. Enter a Bank Payment with the Net Amount for wages in the Cheque Total box. Enter the net wage, PAYE, NI employees and employers as positive figures coded to the regular wages nominal(1000). Enter the sum of PAYE and NI as a negative coded to Wages Control set up in the Liabilities Group(2050)
When the monthly payment is made to Inland Revenue for PAYE and NI enter it as a Bank Payment to Inland Revenue coded to the Wage Control Account.
The true cost of wages, i.e. including NI and PAYE, is now reflected in reports.
Enter the net wage paid to the individual as a Bank Payment coded to regular wages. Enter the total of NI and PAYE contributions as a Nominal Journal from regular wages to Wage Control.
Code the monthly payment to Inland Revenue to the Wage Control Account as above.