Create a manual payroll journal

Salary journals are where you record all the information used to pay your employees. This includes the wage payments actually made to your employees, the amount you have paid to the Revenue for tax etc, as well as keeping track of employee costs.

We recommend that you complete your salary journals at the end of each pay period.

To make sure your accounts are fully up to date, we recommend that you create the following:

• A salary journal showing the amounts due for your wages, PAYE and and pay related social insurance (PRSI), universal social charge (USC). This is so you can accurately track your employee costs,

• A bank payment showing the amount actually paid to your employees, so your bank balance is up to date and you can reconcile this with your bank statement.

• A bank payment showing the amount paid to the Revenue.

Before you start

For whatever payroll system you use, you'll need the following information for each pay period.

• Total PAYE (income tax)
• Total gross pay
• Total net pay
• Deductions and attachments
• Employee pension contributions
• Employee USC contributions
• Employee PRSI contributions
• Employer pension contributions, if applicable
• Employer’s PRSI contributions
• Local property tax deductions, if applicable
  
  

Create the salary journal

When you record details of your payroll, your net wages and the money you owe the Revenue in tax and insurance is recorded as a liability on your balance sheet to show that this is money owing by your business. These are all entered as a Credit in your payroll journal

The other half of the payroll journal records the costs to your business, and is reported on profit and loss. These are all entered as a Debit value.

Your liability is then cleared when you record bank payment to pay your employees and the Revenue.

1. From Adjustments , choose Journals, then New Journal.
2. Enter the pay date for the relevant pay period.
3. Enter a reference and if required a description.
4. Enter the relevant amounts as debits and credit as shown in the following table.
5. Make the Include on VAT return checkbox is cleared, as this is not reported on the VAT return.

The following table shows the details of a salary journal:

Ledger Account code	Ledger Account	Description	Debit	Credit
2210	PAYE	Total tax deducted.		Credit
2211	Other taxes to pay to Revenue	Total of employee and employer PRSI contributions.		Credit
2212	Universal Social Charge	The total USC deducted.		Credit
2216	Local Property Tax (LPT)	If applicable, the total value of LPT.		Credit
2220	Net Wages	The total of the employees’ take home pay.		Credit
2230	Pension	Total employee and employer contributions.		Credit
7000	Employee Costs	The gross wages for all employees, not including statutory payments.	Debit
7006	Employers PRSI Contribution	The total employer PRSI contributions.	Debit
7007	Employer Pension	Total employer pension contributions.	Debit
7009	Other Deductions	If applicable, the total of remaining employee deductions.		Credit

Record payments of wages to your employees

You can record this as a journal or as a bank payment.

Record the bank payment for your wages

Once you've paid your employees, you'll need to make sure your record the corresponding bank payment. This will make sure that you correctly show your wages as being paid in your reports.

Whether you import transactions from a bank feed or create the bank payment manually, make sure you choose the Net Wages ledger account.

To make it easier for you to match with your bank statement, consider creating a separate line for each employee.

1. From Banking, open the required bank account.
2. Choose New Entry, then click Purchase / Payment.
3. Choose Other Payment then enter the date for the payment. this should be the same as your pay date.
4. Enter the total amount paid for the pay period.
5. Create a single line for the total or create separate lines for each employee with the following details:
   1. For Ledger Account list, choose 2220 - Net Wages.
   2. Choose No VAT for the VAT rate.
   3. Enter the amount the employee was paid.

If you're entering separate lines for individual employees, check that the total matches your net wages for the pay period.

Record this as a journal

To do this follow the steps in the previous section and add the following information:

Ledger Account code	Ledger Account	Description	Debit	Credit
Code for your bank account	Bank account	Total net wages.		Credit
2220		Net Wages	Debit

Record payments to the Revenue

When you make your monthly or quarterly payment to the Revenue, you need to show this in your accounts so you can reconcile the payment in your bank and so the amount you owe is reduced and shown accurately on your reports.

Whether you create a payment manually or import via a bank feed or your statement, you'll need to record the payment against various ledger accounts, depending on the breakdown of your liability to HMRC.

1. From Banking, open the required bank account.
2. Choose New Entry, then click Purchase / Payment.
3. Choose Other Payment then enter the date for the payment.
4. Enter the amount paid to HMRC.

5. Add separate lines for tax, national insurance and any student loan payments, if applicable.

   Ledger Account	VAT rate
   2210 - PAYE to pay HMRC	No VAT
   2211 - Other taxes to pay HMRC	No VAT
   2216 - Local Property Tax	No VAT
   2212 - Universal Social Charge	No VAT

Record this as a journal

To do this you need to create the following journal:

Ledger Accountcode	Ledger Account	Debit	Credit
Code used for the bank account	Bank account		Credit
2210	PAYE to pay to HMRC	Debit
2211	NIC to pay to HMRC	Debit
2216	Local Property Tax	Debit
2212	Universal Social Charge	Debit