Staff and Directors Salary postings
Salary Account
Debit Gross Salary 1000
Credit to Wages Payable 800 (Net Salary)
Credit EE NIC to NIC payable a/c 50
Credit PAYE to PAYE payableAC 130
Credit Pension payable EE 20
Credit Bank 800 (Net Salary)
Debit Wages payable 800
Credit Bank 50 (NIC)
Credit Bank 130 (PAYE)
Debit PAYE payable ac 130
Debit NIC payable ac 50
Debit ER Pension Cost 30
Credit Pension Payable 30
Once allowance has been used the following entry is needed for employers contribution.
Debit Salary 50 (ER NIC)
Credit NIC payable A/c 50
In Reconcile net salary paid to employee goes to wages payable.