Payroll - Transactions

I am experimenting with the software to make salary payments. I have done an example wherein I have created Salary and Wages under Expenses Tab and then created a Salary item and linked it to this in the Payroll Items Earnings tab.

I then created a Deductions tab for Staff settlement of bills which the company pays and linked it to staff payables tab under the COA as a Liability.

In the Payslip I create a gross salary of 1000 with a deduction of 100 for Accommodation Electricity and the payslip shows wages payable 900 and staff payables 100 under the liability section.

I now go to spend money and pay the 900 as the salary to the staff. My P&L shows me 1000 as Salary paid and my cash balance reducing by 900. I have the 100 that I deducted in the payslip in the payables account.

How do I now settle this 100, so that it reflects under the expenses in the Electricity section in my P&L and also reduces my cash balance by 100, thus clearing the staff payables section in the liabilities section.

Please let me know if I have done anything wrong.

Also while browsing your replies to individuals regarding payrolls, you have provided links to manager guides to refer to for better understanding. Upon clicking these links it says the page is not longer available and has been moved.

Thanks in advance.

If the business is reimbursing itself then use in the Payslip Deduction Item - Accommodation Electricity - the Electricity expenses account instead of the Staff Payables account. You would only use the Staff Payables account if you were paying the money to a third party, eg superannuation contributions

All Guides are now located under the Guides Topic at the top of the forum page


I am paying to a third party. The company pays for the rent of the staff
accommodation but they have to pay for the water and electricity. So this
gets deducted from their salary and the company pays the utility out.

I have been through the guide but am unable to catch this point. Can you
please tell me it point me in the right direction.

Thank you

OK, if the amount being deducted (100) is being paid directly to a third party, then leave the deduction where it is “Staff Payables”. To pay the third party - Spend Money with the Account = Staff Payables, this will clear out the balance.

However, if the company is paying the third party for everything and the employee is reimbursing the company then change the deduction account to where ever the rental payment to the third party is being posted/allocated.