Module 8 Flashcards
Wages and salaries are what?
An expense that should be included in the P+L of an entity
What are the two schemes of collecting taxes?
PAYE
National Insurance
What are the two types of NI?
Employees (EE)
Employers (ER)
Employers NI is paid from?
The employers funds, not a deduction form wages
An EXPENSE of the company, should be included in the total wages and salaries expense
PAYE and Employees NI are deducted from?
Employees salaries by the employer on behalf of HMRC
Not expenses of company- suffered by employees
Total expenses in P+L for salary expenses incurred by the business?
Gross salary
Employers NI contributions
Actual cash payments to HMRC are?
Expense less:
PAYE
NI Employees
NI employers
Pay over amounts on employees behalf
Journal entry for wages and salaries costs and amount due to HMRC?
Dr P+L wages and salaries
Cr bank
Cr HMRC creditor
(Employers NI included in wage expense)
Journal entry for payment of deductions to HMRC
Dr HMRC creditor
Cr bank
(deductions from their salaries, passed on directly to HMRC)
Employees NI and PAYE are?
NOT separate expenses of the company so should never be shown separately in P+L
Deducted from gross wages and salaries (part of this cost)
Amount due to HMRC will appear as a what? When are they payable?
Creditor
22nd day of the following month
Net wages calculation?
Gross - PAYE - employees NI
What is credited to the bank for wages and salaries?
Net wages
What is a liability to HMRC creditor for wages and salaries?
PAYE + NI employers and employees
Journal entry for employee loan
Dr employee loan debtor
Cr bank
