Payroll Integration Settings

If you subscribe to both Accounting and Payroll, to save you time when you pay your employees, their salary information automatically posts to Accounting. You can choose to post their net wages to your Net Wages Liability Account or automatically post a bank payment for net wages as soon as you complete the pay run. When you record the amount due to Revenue, this also posts the bank payment to clear your liability to them.

If you prefer that your payroll information doesn’t post automatically to Accounting, you can turn this off. You can then manually post your salary journals instead.

To set up or disable payroll integration, you must log into Accounting as the business owner. The business owner is the person who originally signed up to Accounting and has access to all areas of the service.

If you use bank feeds as well as Payroll integration, please remember to discard the net wages/staff payment transaction from your bank feed to avoid duplication. This transaction will already have been posted automatically into your Accounting bank activity from Payroll, you can discard this pending transaction by clicking the button.

Set up payroll integration

  • 1. In Accounting, Go to Settings, then click Payroll Integration.
  • 2. Select the Enable Payroll Journals check box.
  • 3. On the Default Payroll Bank Account list, click the bank account you pay your employees from.
  • 4. Select one of the following options:
  • to the Default Payroll Bank Account (shown above) – If you select this option, when you complete your pay run a bank payment automatically posts for the total net wages value from this bank account with the date of your payroll. This bank account is also used when you record your payment to HMRC.
  • to Net Wages Liability Account – If you select this option, when you complete your pay run, the value of your net wages posts to your liability account. You can then clear the liability at a later date by manually entering a bank payment.
  • 5. Click Save.

You’ve successfully integrated your payroll with Accounting. The next time you complete your pay run, the salary information posts to your accounts.

Disable payroll integration

Within Sage Business Cloud Accounting, complete the following steps:

  • 1. Go to Settings then click Payroll Integration.
  • 2. Clear the Enable Payroll Journals check box.
  • 3. Click Save.

To clear your employees’ net wages liability

If you chose to post your employees’ net wages to the Net Wages Liability Account, to clear your liability, you need to record a bank payment.

Within Sage Business Cloud Accounting, complete the following steps:

  • 1. Go to Banking then click the required bank account.
  • 2. On the New Entry menu, click Purchase / Payment.
  • 3. Click Other Payment then enter the date you want to use for the payment.

The date you actually pay your employees should be the same as the pay date in Payroll.

  • 4. In the Total Payment box, enter the net wages value and if required, enter a reference.
  • 5. On the Ledger Account list, click Net Wages (2220 or 2250, whichever ledger is included in your chart of accounts for Net Wages).
  • 6. Enter any additional details then on the VAT rate list, click No VAT.
  • 7. Check the total is correct.

To make it easier to match the transactions against your bank statement, you may want to enter an individual item line for each employee. If you do this, you need to change the total for each line to match the individual employee’s net wages.

  • 8. Click Save.

You’ve now recorded the payment to your employees and cleared your liability. You need to repeat these steps each time you pay them.

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