PAYG clearing account

[ya53]

I read support note "Using pay liabilities and BAS" and watched video. The vdeo shows creating PAYG clearning account in Liabilities with A/C type "credit card", yet the further reading suggests to create it in Asset with A/C type "Bank".  Can you clarify which is correct? I already created as video suggested...

[Steven_M]

Hi @ya53 

I've watched that video and had a look at Support Note: Using Pay Liabilities and BASlink it can be a little confusing.

I would go with a Liability Credit Card account as per the video. Due to the fact that you are required to pay it and therefore it should be a liability to the company. The actual account doesn't really matter as you would record the pay liabilities transaction and then do your Spend Money transaction to cancel it off afterwards. So the account should in theory be zero. However thank you for bringing to our attention, I've arranged for the Support Note to be updated to be the same as the video.

[ya53]

Hi Steven,

Thank you for your advice.

The note is from 2006 and may be outdated.

Thanks again!

[DuncanS · Accepted solution]

Yoko,

The important issue is to make sure that the GST and PAYG - W accounts on the Balance Sheet are reconciled to the GST Reports and Payroll Reports each time a BAS or IAS is lodged.

One way to do this is to use a GST Clearing Account.

When I prepare a BAS or IAS, I print out the Balance Sheet and the GST Reports/Payroll Reports and make sure that they agree. If lodging the BAS on a Cash Basis, the GST should be different 1/11 if all invoices have GST.

When paying the ATO, I use Spend Money and allocate according to the BAS - I do not use a clearing account during the financial year. At year end, I have a Balance Sheet account called BAS April - June 201x.

The same procedure should apply when paying SGC.

I have attached my GST Checklist.

Hope this helps.

Duncan

[ya53]

Hi Duncan, Thanks for all the tips.  I will use your GST check list.

Yoko