Overview

Payroll refers to the steps and processes involved in compensating employees, including calculating earnings, applying deductions, and distributing net pay. Payroll transactions are essential for ensuring employees are paid accurately and on time, while also meeting legal obligations for reporting and deductions.

These tutorials explain how to enter payroll transactions where confidentiality is required, and where confidentially is not required.

Navigation: Main Menu > Accounting > Ledger

How to Create Payroll Expenses

This process is to enter the payroll expenses in your accounting records.

It assumes you will receive a summary sheet from the Payroll Department. You can enter as much or as little detail as you wish. Below are two examples:

Entering information in summary format:

Debit Entries (Account > Description > Amount)

• Salaries: Admin > Admin Salaries for November > 10 000

• Salaries: Production > Production Salaries for November > 20 000

• Salaries: Directors > Directors' Salaries for November > 20 000

• Pension Fund > November Contribution to Pension Fund >    2 500

• UIF Expense > Company Contribution to UIF > 500

Credit Entry (Account > Description > Amount)

• Payroll Liabilities > November Salaries > 53 000

Entering information in detail:

Debit Entries (Account > Description > Amount)

• Salaries: Admin > Sally's Salary > 7 850

• Salaries: Admin > Sally's UIF > 80

• Salaries: Admin > Sally's PAYE > 70

• Expenses Pension: Admin > Sally's Pension Company Contribution > 100

• Expenses UIF: Admin > Sally's Company Contribution >        80

Credit Entry (Account > Description > Amount)

Payroll Liabilities > Sally's Total Cost to Company > 8 180

Steps

1. Navigate to the Ledger.

2. Click New (button) > Select Payroll Expenses from the dropdown list.

3. Select the date and period 

4. Enter the reference.

5. Click Add Item (button).

   1. Select the Payroll Expense account next to Dr. Account.

   2. Type in the amount in the Total (Exc) field

   3. VAT = 0.

6. Repeat Step 5 as often as needed.

7. Click Done (button). 

For more flexibility, Payroll Expenses can also be entered as a General Journal.

How to Enter Payroll Payments

This process is to capture the cheques or EFT payments made to staff and other departments.

In summary format: 

Debit Entries: Account > Description > Amount

• Payroll Liabilities > Payments to Staff > 44 500

• Payroll Liabilities > Payment to Pension Fund > 2 500

• Payroll Liabilities > Payment to SARS (Tax Authorities) for PAYE > 5 000

• Payroll Liabilities > Payment to SARS for UIF > 1 000

Credit Entry: Account > Description > Amount

• Bank Account > November Payments > 53 000

Entering information in detail:

Debit Entries: Account > Description > Amount

• Payroll Liabilities > Sally's Salary > 7 850

• Payroll Liabilities > Payment to SARS for Sally's UIF > 160

• Payroll Liabilities > Payment to SARS for Sally's PAYE > 70

• Payroll Liabilities > Payment to Pension Fund Company >     100

Credit Entry: Account > Description > Amount

• Bank Account > Total Payments for Sally > 8 180

Steps

1. Navigate to the Ledger.

2. Click New (button) > Select Payroll Payments from the dropdown list.

3. Select the date and period

4. Enter the reference.

5. Select the Bank Account next to Cr. Bank

6. Type in the amount

7. Select No VAT.

8. Change the Description. 

9. Click Done (button). 

Payroll Payments can also be captured when doing a Bank Import.