Reconcile unpaid director wages

[DT33]

Hi

I have recorded wages for a director through payroll, however these wages will remain unpaid (offsetting director loan).

The wages aren't showing up in the reports, I'm guessing because they haven't been "paid".

They are also appearing in the bank reconciliation.  

How do I mark the wages as reconciled/paid?

Thanks

[DT33]

I think I've solved my first problem - I have changed this employee's settings to being paid from "cash" and going to the electronic clearing account.  Hoping this will work?

But I still don't know what to do with the old pay runs - do I need to delete them and redo in order to reconcile correctly?

Thanks

[Tracey_H · Accepted solution]

Hi @DT33 

Thanks for your post. Changing the employee payment method to electronic means that those payruns will now be sitting in the Prepare Electronics Payment window. To clear them from that window you would need to create a Bank File, which will also record a transaction in your software transferring those amounts from the electronic clearing account to the bank account. So you'll be back at the same place, you can't reconcile those transactions because no funds have been withdrawn from the bank. So you would be best leaving the payment method as cash or cheque.

Generally speaking if a director's wage is offsetting a loan account you would need to report this is your software. How this is done will depend on the set up of the director loan account so I would recommend speaking to the accountant about the applicable General Journal. You should be able to offset the wage amount in the bank reconcilation window so that you can reconcile the bank account and allocate the wage to the director loan account.

Can you clarify which reports the wages aren't showing up in? Once a payrun is recorded in AccountRight it is considered to be paid so you should see those wages in your MYOB payroll reports. If you are referring to the STP reports check that the director's employment basis is not set to Other as this will exclude them from STP reporting.

Please let me know if you need further help.

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

[DT33]

Hi Tracey

Thanks for your reply! 

We did actually enter a general journal to offset the wages, and reconciled the bank at 30/4/20, but now the pay has reappeared in this months bank reconciliation as unreconciled and the payment date has changed to 1/5/20 (even though I can see it was reconciled in last month's reports!).

I thought the wages weren't showing up in the Payroll activity reports, and they don't for the period that I've entered them for.  But I've just checked and the April pay is showing in that report for the month of May - I'm presuming because the pay date has changed as mentioned above. 

I am wondering if it would just be easiest to go back and delete those pays and redo them?  Do you think this would work?

Thanks for your help  

[Tracey_H]

Hi @DT33 

If you make any changes to a reconciled transaction it will become unreconciled so changing the payment date is why it has reappeared in the Reconcile Accounts window.

When it comes to payroll the ATO use the payment date to determine which month/quarter/FY a pay falls into, not the pay period. So if the payment date is the 30th April income, PAYG and super are all included in April figures. If the payment date is the 1st May they are all included in May figures. 

If the payment date was actually the 1st May then you don't need to do anything with the pays, they are correct. You do need to undo the April bank reconciliation and then re-reconcile because it will now be out of balance. The offsetting GJ and payroll transaction will be reconciled in May. 

If the payment date should be 30th April, you will need to delete the pays and reprocess with the correct payment date. You will also need to undo the April reconciliation and redo it.

This help article will help with undoing a bank rec: Resolving out of balance bank reconciliations 

Please let me know if you are still having issues.

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

[DT33]

Hi Tracey

Thank you, it all makes a bit more sense now.

I have removed and reprocessed the pays using cash and it all looks ok  now.

Thanks for your help.