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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Payroll on Business Ce...
Small and medium business | Business Central, N...
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Payroll on Business Central Recomendations

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Posted on by JSTM 36
Currently, we do not have payroll customization, we would want to know how we can register an Employee's Total salary + Deductions (Income Tax and Social Security) from the whole salary. We have a total Salary for an employee that needs a deduction to become a Net Salary. 
 
How would I register in a general Journal: Total Salary - Social Security - educational insurance for an employee
Example:                                                                                    Dr                        |                 Cr
Total Salary: 100                    Salary Expense:                         100,00                    |
SS: -15                                   Social Security Payable                                           |                 15,00
EI: -5                                     Education insurance Payble                                    |                 5,00
Total Net Salary: 80$             Cash/Bank Net Salary to employee                         |                 80,00
 
For the SS and EI
 Example:                                                                                 Dr                        |                 Cr
SS: 15,00                  Social Security  payable                     15,00                        |               
EI                            Educational Insurance payable                5,00                     |               
Cash/Bank              Bank payment to government                                           |              20,00   
 
 
The thing is that I could not use Employee Posting Group for this type of transaction, I would need the Payroll Extension right? 
I could register this in the general journal (Page -> Show less) however, it will not be on the employee profile  
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  • JSTM Profile Picture
    JSTM 36 on at
    Payroll on Business Central Recomendations
    Hello Yi Yong, yes it would be an extensive work to finish  the payroll function for each employee. Additionally, The S.S and EI amount needs to be open to then make a payment to Gov because that amount is for the government and its not an expense, its a Deduction from total salary.... 
     
    Kaspar, the percentage are the same, however in another deduction called I/S it has different % depending on the annual income. Thanks For the link I will revised it. 
     
    Hello Andy, well yes we currently have a Payroll Software that we are going to use, however we would like to register the payments for the employees. Right now we can record the net salary, and the deduction a total amount separately however the only issue here is that, the deductions S.S and EI are not an expense of the company, they are a deduction of the total salary of the employees that we pay to the government. 
    How can I introduce an amount directly to the Social Security Payable? without balancing to an Expense Account? The Social Security for the employee is a deduction, not an expense. 
     
    Thanks for your answers!
  • Suggested answer
    Andy Wingate Profile Picture
    Andy Wingate 320 on at
    Payroll on Business Central Recomendations
    Hello
     
    This level of detail is usualy better in the payroll software not in your general ledger (in BC). Most comapnies will run a seperate payroll system or use an external service and simply journal staff costs each month to match the outgoing from the bank for salaies.
     
    Employee ledger is more usualy used for expense claims.
     
    Cheers,
    Andy
  • Suggested answer
    KasparsSemjonovs Profile Picture
    KasparsSemjonovs 3,926 Super User 2024 Season 2 on at
    Payroll on Business Central Recomendations
    Hi,
    if the percentages are the same for all employees, then You could use allocation accounts.
    Check this guide by Yun Zhu:
    Business Central 2023 wave 2 (BC23): Use General Ledger Allocations to distribute costs and revenue more efficiently (Allocation Account) | Dynamics 365 Lab (yzhums.com)


    Usually, payrolls are quite complicated and would require either an add-on or a separate 3rd party system, that could maybe integrate with BC or via file exchange import the costs to BC. But if You have that already, and just want to register the costs in BC or Your company's salary calculations are pretty straight forward, allocation could work great.
  • Suggested answer
    Yi Yong Profile Picture
    Yi Yong 1,382 Super User 2024 Season 2 on at
    Payroll on Business Central Recomendations
    Hello JSTM,
     
    If you need these expenses to be recorded in the employee subledger, then you need to use as Balancing Account.
     
    The net payable to the employee will be 80.

    The disbursement of salary entry
    Cr Bank 80
    Dr Employee 80

    Then, you need to post these entries when paying the government body for the deductions.
    Dr SocialSecurityPayable 15
    Cr Bank 15
    Dr EducationInsurancePayable 5
    Cr Bank 5
     
    However, it is not a good idea to post individual salaries in Business Central because these should be private and sensitive.

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