Posting Payroll

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

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In Reconcile net salary paid to employee goes to wages payable.