Create a manual payroll journal

Summary

How to manually create a payroll journal in Accounting Start.

Description

This explains how to record information about your payroll in your accounts, such as details of your wages, tax, and insurance. Here we'll tell you:

How to record salary payments made to your employees
Maintain a detailed ledger recording payment for tax, PRSI, USC, ensuring accuracy and compliance with regulations.

If you subscribe to both Accounting Start and Payroll, save time, and send salary details directly to Accounting when you complete your pay run. See Payroll and Accounting integration.

Resolution

Salary journals record wage payments, tax payments to Revenue, and track employee costs for payroll processing.

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

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

Track employee costs by maintaining a salary journal detailing wages, PAYE, PRSI, and USC amounts due
Record bank payments to employees for accurate bank balance and reconciliation with statements
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 creating the salary journal, you'll note payroll details, net wages, and tax/insurance owed to Revenue, recorded as liabilities. We credit these in the payroll journal.

The other half of the payroll journal records the costs to your business and reported on the profit and loss. Enter all of these as a Debit value.

Your liability clears when you record bank payments to pay your employees and the Revenue.

From More, choose Journals, than New Journal.
Enter the pay date for the relevant pay period.
Enter a reference and if required a description.
Enter the relevant amounts as debits and credits as shown in the following table.
Ensure you uncheck "Include on VAT Return" since it isn't reported on the VAT Return.

NOTE: Be sure to uncheck "Include on VAT Return" since it isn't reported on the VAT Return.

The following table shows the details of a salary journal:

Category code	Category	Description	Debit	Credit
2210	PAYE/USC to pay to Revenue	Total tax deducted.		Credit
2220	PRSI to pay to Revenue	Total of employee and employer PRSI contributions.		Credit
2270	Universal Social Charge	The total USC deducted.		Credit
2280	Local Property Tax (LPT)	If applicable, the total value of LPT.		Credit
2250	Net Wages	The total of the employees’ take-home pay.		Credit
2260	Pension	Total employee and employer contributions.		Credit
7000	Employee Wages and Salaries	The gross wages for all employees, not including statutory payments.	Debit
7020	Employers PRSI	The total employer PRSI contributions.	Debit
7030	Employer's Pension	Total employer pension contributions.	Debit
7050	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 record the corresponding bank payment. This will make sure that you show your wages 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 category.

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

From Banking, open the required bank account.
Choose New Entry, then click Money out.
Choose Other Payment then enter the date for the payment. This should be the same as your pay date.
Enter the total amount paid for the pay period.
Create a single line for the total or create separate lines for each employee with the following details:
From the Category list, choose 2250 - Net Wages.
Choose No VAT for the VAT rate.
Enter the amount paid to the employee.

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:

Category code	Category	Description	Debit	Credit
Code for your bank account	Bank account	Total net wages.		Credit
2250	Net Wages	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. This is so you can reconcile the payment in your bank. The amount you owe reduces and shown on your reports.

When you create the payment, you'll need to record it against various categories. This depends on the breakdown of your liability to the Revenue.

From Banking, open the required bank account.
Choose New Entry, then click Money Out.
Choose Other Payment then enter the date for the payment.
Enter the amount paid to the Revenue.
Add separate lines for tax, national insurance, and any student loan payments, if applicable.

Category	VAT rate
2210 - PAYE/USC to pay to Revenue	No VAT
2220 - PRSI to pay to the Revenue	No VAT
2280 - Local Property Tax (LPT)	No VAT
2270 - Universal Social Charge	No VAT

Record this as a journal

To do this, you need to create the following journal:

Category code	Category	Debit	Credit
Code used for the bank account	Bank account		Credit
2210	PAYE/USC to pay to Revenue	Debit
2220	PRSI to pay to Revenue	Debit
2280	Local Property Tax (LPT)	Debit
2270	Universal Social Charge	Debit

Create a manual payroll journal

Summary

Description

Resolution

Before you start

Create the salary journal >

Record payments of wages to your employees >

Record the bank payment for your wages

Record this as a journal

Record payments to the Revenue >

Record this as a journal

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