Book Keeping question : Payroll

hinault

This may sound like a stupid question but here goes.

Payroll journal entry.

31/7/2009 : Gross salary = €6,000.
Accounting entries made were : Dr salary expense €5,402, Dr PAYE/PRSI/Inc levy expense €598.00 and Cr bank €6,000.



31/12/2009 : Gross salary = €19,255.
Accounting entries were : Dr salary expense €13,758,Cr bank €13,758.
No accounting entries were made for PAYE/PRSI/Inc Levy (€5,496) due payable at 31/12/2009 but not paid until 14/01/2010.

What should be the accounting entry at 31/12/2009 for €5,496.00 due payable?

Thanks in advance

killiank

31/12/2009 : Gross salary = €19,255.
Accounting entries were : Dr salary expense €13,758,Cr bank €13,758.
No accounting entries were made for PAYE/PRSI/Inc Levy (€5,496) due payable at 31/12/2009 but not paid until 14/01/2010.


Hi,

The first question I would have is of the PAYE/PRSI was any part of this relating to employers PRSI. If not then you would simply DR Gross Pay/salary expense in the P & L with €5,496 & CR the PAYE/PRSI account in current liabilities with €5,496. This is presuming that the whole PRSI element relates to employee PRSI.

If part of the €5,496 relates to employers PRSI then its usually analysed separately from Gross salary. If this is the case then you would simply split the €5496 between Gross Salary & Employers PRSI in the P & L (total €5496) & you still have the CR €5,496 in current liabilities in the balance sheet. You dont need to split out the employees PRSI or income levy or PAYE as these are deductions from the employee & not additional costs to the company.

If you have not accounted for Employers PRSI at all & you need to then you DR Employers PRSI in the P & L & you CR PAYE/PRSI payable account in current liabilities.

I hope this helps (& that I havent confused things further)

Killian

hinault

killiank wrote: »

31/12/2009 : Gross salary = €19,255.
Accounting entries were : Dr salary expense €13,758,Cr bank €13,758.
No accounting entries were made for PAYE/PRSI/Inc Levy (€5,496) due payable at 31/12/2009 but not paid until 14/01/2010.

The first question I would have is of the PAYE/PRSI was any part of this relating to employers PRSI. If not then you would simply DR Gross Pay/salary expense in the P & L with €5,496 & CR the PAYE/PRSI account in current liabilities with €5,496. This is presuming that the whole PRSI element relates to employee PRSI.

Thanks.

The entire € 5,496 PRSI relates to employees PRSI.
There is no element of that PRSI which relates to employers PRSI.

So you're suggesting debit salary expenses € 5,496 and credit PAYE payable € 5,496 (balance sheet) at 31st December 2009.

Then to reflect the payment of the € 5496.00,
The accounting entry at 14th Jan 2010 - for the payment of €5,496 -
would be credit bank and debit PAYE payable?

killiank wrote: »

If part of the €5,496 relates to employers PRSI then its usually analysed separately from Gross salary. If this is the case then you would simply split the €5496 between Gross Salary & Employers PRSI in the P & L (total €5496) & you still have the CR €5,496 in current liabilities in the balance sheet. You dont need to split out the employees PRSI or income levy or PAYE as these are deductions from the employee & not additional costs to the company.

If you have not accounted for Employers PRSI at all & you need to then you DR Employers PRSI in the P & L & you CR PAYE/PRSI payable account in current liabilities.

I hope this helps (& that I havent confused things further)

Killian

No element of the PRSI relates to employers PRSI.
It is all PRSI for an employee.

Thanks

looperman1000

I am doing an assignment for college I have to fill out a P30 I am just wondering when when your calculating the PRSI for the month do you include what your employer is paying too??? please help

gerrykeegan

looperman1000 wrote: »

I am doing an assignment for college I have to fill out a P30 I am just wondering when when your calculating the PRSI for the month do you include what your employer is paying too??? please help

Yes employers prsi employees prsi employees tax and usc

gerrykeegan

looperman1000 wrote: »

I am doing an assignment for college I have to fill out a P30 I am just wondering when when your calculating the PRSI for the month do you include what your employer is paying too??? please help

Yes employers prsi employees prsi as one total and tax and usc as another

looperman1000

thanks Gerry, I have one more question im doing a single assessment sheet her name is Vicky her taxable pay is 21,200 is it possible for her SRCOP to be higher than her taxable pay??? could you please help im pretty sure this isn't right but not 100% confident?

gerrykeegan

looperman1000 wrote: »

thanks Gerry, I have one more question im doing a single assessment sheet her name is Vicky her taxable pay is 21,200 is it possible for her SRCOP to be higher than her taxable pay??? could you please help im pretty sure this isn't right but not 100% confident?

The standard rate cut off point is 32800 for a single person. It's the same for every single person irrespective of their pay.