Pearl does not calculate the PAYE and NI required for payroll purposes (it’s being developed) - you will need to use another software package or get your accountants to give you the payroll data.

When you receive your payroll statement from your payroll manager, you will have a liability to your staff and the Inland Revenue. Until these balances are settled (when you actually pay your staff or send a cheque to the IR), you have a current liability that needs to show up on your balance sheet.

When the balances are paid, do a bank transfer from current account or cheque account to employee or Inland Revenue. These two stages cancel each other so that you have no liabilities and your Profit and Loss report will show the correct overheads.

There are two steps to entering wages into Pearl : the first is to create the wages journals and the second is to make the payments from your bank account. If you just have time to pay your employees (step 2), then you must use the wage wizard later at some point to update your profit and loss accounts correctly.

It is not enough to simply record the payments made to your staff or the inland revenue from your bank account.

1. Enter wages using the wizard
   1. Open the Wage Wizard
   2. From your payroll report, copy across the relevant figures. Total debits must equal total credits
   3. Submit the form
2. Bank payment (to employees)
   1. Open the Bank payment page
   2. Select your bank account
   3. Choose code 2200 (Net wages)
   4. Enter the payment date and amount
   5. Select tax code T9
   6. Submit the form
3. Bank payment (to HM Customs)
   1. Open the Bank payment page
   2. Select your bank account
   3. Choose code PAYE (2210) or NI (2211)
   4. Enter the payment date and amount
   5. Select tax code T9
   6. Submit the form
4. Bank payment (to pension company)

Create another bank payment, to account 2230, tax code T9.

Once you have completed the payroll cycle, ie entered the Wages wizard and then made the payments to your staff and the inland revenue, your Trial Balance should show no value for NI, PAYE or Net wages.