Employee Payslip Deductions

On an employee payslip PAYE and UIF are being deducted as well as an UIF company contribution.

The payslip is as follow: -

This payslip indicates that PAYE and UIF are being deducted from the employee to pay over to the Revenue Services and the Department of Labour.

In addition to this the payslip also reflects an UIF amount (Company Contribution) the company must pay over to the Dept of Labour.

In looking at the Income statement as follow: -

The PAYE and Employee UIF reflects in brackets.
In other words only the nett salary and the UIF Company contribution is reflecting as expenses.

In looking at the Balance Sheet: -

I only see the nett salary and the UIF Company Contribution as liabilities. What happened to the PAYE and Employee UIF

Your questions pertain to the difference between income statement accounts and balance sheet accounts. The former describe performance. The latter describe position. Learn about accounting at http://www.accountingcoach.com.

These are not issues about Manager, which follows standard accounting practices.

“I only see the nett salary and the UIF Company Contribution as liabilities. What happened to the PAYE and Employee UIF”

Thank you for the link.

According to what I take note of is that this is a software problem due to the following: -
One can not anywhere see what is owed to the Receiver of Revenue or the Department of Labour in respect of the Employee deductions. How are one going to know what to pay?

@Kobus, can you show screenshot how did you setup payslip items under Settings tab?

With Pleasure,

PAYE account must be categorized as a liability account. It is not an expense account. PAYE represents your PAYE liability.

Similarly, UIF - Employee is also liability account but you have it categorized under your Chart of Accounts as expense account.

What I suggest, create UIF liability account. When setting up your payslip items, UIF liability account should be used on UIF deduction item and also on UIF contribution item under Liability account field.

When you do all this, your P&L will contain two expense accounts:

  • UIF - company (representing your UIF contribution expense)
  • Wages & salaries (representing gross pay to employees)

Then balance sheet will contain:

  • Employee clearing account (amount payable to employees)
  • PAYE (amount payable for PAYE)
  • UIF liability (amount payable for UIF)

Thank you for this valuable advice. I will try it and report back to you

Lubos, This seem to have worked as per the screenshot: -

Only one question.
Since the Company Contribution is also a liability, why does it show as a credit. Should it not be as the other two transactions?

I didn’t say anything about UIF - company. That part you had correct. Go back to chart of accounts and set category to Expenses for UIF - company

Thanx Lubos. This worked.