In this video I demonstrate two separate examples in excel of how gross wages, net wages, employers pension contributions, employees pension contributions, employers national insurance and employees national insurance is accounted for with the use of T accounts.

I also provide the journal details with the relevant debits and credits as well as what the payment journal entries would be in the financial statements.

It is useful to remember that the wages control account, pension control account and PAYE (pay as you earn) and NI (national insurance) control accounts are all liabilities as they relate to money owed outside of the business such as to HMRC or to the employees in the business.

When completing the profit and loss T accounts and journal entries remember that we need to look at this from the point of view of the employer and not the individual employees.

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For more beginner tutorial videos check out the debits and credits tutorial below:
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