Employment Allowance on Journals

If your business qualifies for Employment Allowance and you would like the figures to appear in your Journal then please go to 'Payroll Settings' > 'Business Settings' > 'HMRC Settings'.

If you then place a tick in the '2020/21' tick box under the 'Will you be claiming the employment allowance?' then place a tick in the tick box which applies to your business under the 'Which state aid sectors do you operate in?' option and then choose the 'Yes' radio button under the 'Include employment allowance in journals' option and 'Save'.



Once you create your journal* you will notice that you will now have 2 additional lines.

Debit - NIC Payable with the amount of employment allowance being claimed this period and
Credit - Employers NI with the amount of employment allowance being claimed this period.

Your payroll platform will then keep a track of the balance of employment allowance so that the current year's threshold is not exceeded. The 2020/21 threshold is £4,000.

*(More information on setting up Journals can be found here Journals)


Please note that the nominals used in this example are for illustration purposes only and yours may differ.

Once the 2020/21 threshold of £4,000 has been achieved the additional lines on the journal will not appear.

If you make a change to an earlier payroll after the journal has been created, payrolls which have been run since that period, may have had that journal amended to account for any change to the employment allowance. You should then click into any payroll processed since the period you have amended and re-download the journals.

Please note, if you are running multiple pay runs such as weekly, fortnightly and/or monthly, once you reach your threshold of £4,000 across the various pay runs, the additional lines will no longer appear in the journals. If however, you do make changes to any of the earlier pay run(s) which results in the threshold no longer being reached, then the additional lines will appear on the next pay run(s) you run, until the £4,000 threshold is then reached again.

If you have any questions or feedback, please let us know at support@yourpayroll.co.uk



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