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Level 1

Recording PAYE employment transactions

If i also have PAYE employment, how should i identify this income in quickbooks transactions so it doesn't mess up my tax calculation?

17 REPLIES 17
QuickBooks Team

Recording PAYE employment transactions

Hi JP19

 

Are you using the Quickbooks Payroll?

 

Kind regards

 

Emma

Level 1

Recording PAYE employment transactions

Hi Emma, I'm also wondering about this. 

 

I'm self employed as a freelance graphic designer, but the company I have just worked for pay through their payroll, so my pay is taxed at source in this instance.

 

The money has been paid into my business account, do I still select 'business income' as the category, even though all tax and NI has been paid on it? I don't want it to process as if I have tax to still pay on it.

 

Thanks! 

QuickBooks Team

Recording PAYE employment transactions

Hello

 

As far as we know, you do have £11,850 of personal allowance, and so marking this as business income should not affect your tax - however we do recommend speaking to an accountant to double check this.

 

Thanks,

 

Talia

Level 1

Recording PAYE employment transactions

No, I am operating through quick books self employed. But some of my income is PAYE and has been taxed at source. Currently I’ve categorised it as wages but it then classes it as business expenses. Should I just categories as personal to remove it from the equation in terms of reporting on my self employed finances? Thanks
QuickBooks Team

Recording PAYE employment transactions

Hi jp19

 

You can categorise it as owner withdrawl, however we always recommend contacting accountant

Level 1

Recording PAYE employment transactions

Hello, Has this been resolved? The whole reason I wanted to use QuickBooks was to not get involved with an accountant and simplify my tax but this thread and others indicate that you can't recommend what to when people get paid through PAYE when also freelancing. This clearly happens a lot, is there any way the next update can include an option to indicate fees that have had tax and NI taken at the source? Please please advise? Best, Abi

Moderator

Recording PAYE employment transactions

Hello there, Abskybabs,

 

You can add your PAYE employment transaction on the Tax profile. The tax profile lets you enter the other income you have aside from self-employed income. You can add it under estimated employment income.

 

Here's how:

  1. Click the Gear icon.
  2. Select Tax Profile under Taxes.
  3. Go to the Estimated employment income field and enter your PAYE earnings.
  4. Click Save.

This is how it should look like:

 

 

I'll be around if you have other questions.

Level 1

Recording PAYE employment transactions

Hi MarylurleenM 

I am having the same issues on the QB self employed , I have entered my PAYE salary in estimated employment income , yet it does not seem to make any difference 

 

I have added 45,000 in estimated and  I have had a number of self employed invoices paid so I know I should be paying tax yet my tak estimate is Zero and only seems to account for the self employed income not my PAYE income which is already taxed 

 

do I need to add my PAYE AS A TRANSACTION ???

QuickBooks Team

Recording PAYE employment transactions

Hello Rick-dst

 

 

Thanks for reaching out to the Community

 

In the Self Employed product creating invoices and marking them as paid does not impact the income for the business.You would need to add it in the transactions section using the add transaction button (unless you have your bank account connected in which case  you can in the transactions section just categorise it to add it in) and for example categorising it as business income.

 

You should then see if you go to reports>tax summary an impact both on income and if it should be tax as well

 

 

Emma

Level 1

Recording PAYE employment transactions

Thank you; this is useful. By 'PAYE earnings' ('estimated employment income') you mean gross or net income?

Thank you. 

 

Moderator

Recording PAYE employment transactions

Hello, TM80.

 

Using simplified expenses, your self-employment taxes are base on the following:

  • Projections based on your recorded business-related income and spending
  • allowable expenses 
  • the information you have set up in your Tax Profile.

 

Just make sure to categorize your transactions correctly so you'll have an accurate estimated taxes. Also, you can review the information entered in your Tax Profile settings. You can refer to this article for more insights: How QuickBooks Self-Employed calculates tax payments.

 

Alternatively, I'd recommend consulting with your tax adviser so you'll be guided in selecting the proper categories for your transactions and earnings.

 

To learn more about self-employed taxes, you can check these articles to learn more: 

Let me know if you have other questions. I'm always here to help and provide additional insights. You have a great rest of your day!

Level 1

Recording PAYE employment transactions

Hi, 

thank you, but this does not answer my question. My question referred to a previous answer of MaryLurleenM (in this thread), where she says: "Go to the Estimated employment income field and enter your PAYE earnings".

My question was if by PAYE earning she means gross or net income. I'd appreciate an answer to that. 

Thanks

QuickBooks Team

Recording PAYE employment transactions

HI TM80

 

The amount you enter is the estimated gross figure.

Level 1

Recording PAYE employment transactions

Hi

 

If I add my income under this, do I also need to show it as a business profit (imported form my account)? Or would that duplicate it?

 

Thanks

QuickBooks Team

Recording PAYE employment transactions

Hello Fiona Lou

 

If you are adding income in the estimated employment income section in the tax profile section it will only be there as something for you to reference when filling in the SA103F form on HMRC website.It will not affect the tax summary report or income tax calculation within the QuickBooks product itself.The tax summary report includes boxes 15-47 of the SA103F .Box 47 being net profit.You can add any business income via the transactions section and that will impact the tax summary.

 

The QuickBooks product does not take PAYE into account it has not been made to deal with already taxed income.

 

Any questions just reply back here in the Community

 

Emma

 

Level 1

Recording PAYE employment transactions

Hi

I too was getting quite concerned about this today, as I am a freelancer who also is paid for a part time job through PAYE. The problem with not taking PAYE salary into account is that the resultant tax calculation will be completely wrong due to the fact that the PAYE salary eats into all or some of the tax free allowance. This deems the QB tax estimate to be wrong, and understated. It's such a fundamental part of the self assessment tax return that it begs the question why this matter hasn't been addressed by Quickbooks already? It wouldn't be difficult to take into account, as all you need is the gross salary and tax already paid, then the tax calculation could be made accurately. I really hope Quickbooks look into this soon.

Many thanks.

Level 1

Recording PAYE employment transactions

Agreed. It’s really annoying that it doesn’t take the PAYE earnings into account when calculating the tax owed. I’ve ended up putting my Personal Allowance as £0 so at least it’s not totally underestimating what I owe.