SALARIES

 

 

Author:                   Cindy Kruger

Date:                      June 2007

Audience:             Bookkeeping

Summary:              How to post your Salaries correctly

 

 

CONTENTS:

 

·                     Introduction

·                     Opening the correct ledger accounts

·                     Posting procedure

 

Introduction:

 

A common query among LegalSuite users is how to capture Salaries. This white paper will assist you in posting the correct journal entries to the correct ledger accounts.

 

Opening the correct Ledger accounts

 

Firstly the correct ledger accounts need to be opened in your business ledger. You will need to open Nominal ledger (Expense) accounts for the following:

Ÿ         Salaries

Ÿ         UIF – Company Contribution

Ÿ         SDL - Company Contribution

Ÿ         Medical Aid  - Company Contribution (If required)

Ÿ         Pension Fund  - Company Contribution  (If required)

 

You will then have to open the following control accounts in your balance sheet (Current Liability).

Ÿ         SARS Control

Ÿ         Salaries Control

Ÿ         Medical Aid Control (If required)

Ÿ         Pension Fund Control (If required)

 

How to insert in a new Ledger Account

 

1.       Click on the Business Ledger icon on your top toolbar to open the business ledger

2.       Click  in the main toolbar, or right-click on the Business Ledger Listing and select insert.

3.       Type in the description  i.e. Salaries Control Account

4.       Select the type i.e. Current Liability

5.        Click .

 

 

 

 

Posting Procedure

 

It is very important to post the entries to the correct accounts. This will assist your auditors when they are auditing your books. Below is an example of how to capture a salary correctly

 

Payslip:

 

 

The following Journals need to be captured and posted. All the journals are business journals:

 

  1. Dr Salaries Expense account and Cr the Salaries Control account with R10 000
  2. Dr Salaries Control account and Cr SARS control account with R500 for PAYE
  3. Dr Salaries Control account and Cr SARS control account with R250 for the employee portion of UIF
  4. Dr UIF expense account and Cr SARS control account with R250 the company portion of UIF.
  5. Dr SDL expense account and Cr SARS control account with R250 the company portion of SDL

 

The end result will be as follows:

 

 

 

The next step is to post your Business Payment for salaries paid to your Salaries Control Account for R9 250.

 

Open your Batches screen, by clicking on the  batches icon, click on the payments tab and select the Business Payment option. In this screen you will capture your business payment

 

 

To Pay SARS , you need to capture a business payment to the SARS control account for R1250 (normally only paid by the 7th of the following month).

 

 

 

The end result is:

 

 

Once you have posted all the correct entries you will see that everything balances out and the correct entries including the companies contributions are reflected as business expenses.