PAYE Income Tax & NI

What nominal code do I use in Sage for PAYE Income Tax NI National Insurance and Payroll?

The Payroll journal will have entered the Cost of employment into several sections of the Profit and Loss account and left the liabilities in the appropriate control accounts in the Balance sheet for you to may your payments against.

NOTE: NI and PAYE are shown separately here, however it is fairly common practice to use one account for both items

The journal creates balances on the following accounts each representing money that you have to pay. All the bank payments relating to these go against the appropriate nominal code and should CLEAR the account balance, IF YOU DO NOT HAVE A ZERO BALANCE AFTER POSTING then you have made a mistake.

2202 - VAT Liability

2210 - PAYE Liability

2211 - NI Liability

2220 - Wages Liability

2230 - Pension Liability

Payroll Journals are typically fairly complex to calculate, if you split wages between two departments, you also have to split the tax, ni, and pensions costs as well, this is where a payroll program pays dividends, it can do all the sums for you and many even do the journal as well.