Recording PAYE employment transactions

Hi JP19

Are you using the Quickbooks Payroll?

Kind regards

Emma

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! 

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

Hi jp19

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

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

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.

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 ???

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

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

Thank you. 

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: 

• Expenses if you're self-employed 
• Three tax calculations to help you at tax time
• QuickBooks Self-Employed UK Tax Profile Set Up

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!

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

HI TM80

The amount you enter is the estimated gross figure.

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

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.

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. 

Where is this? I have QB payroll and 'tax' and 'tax profile' doesn't exist. I am also PAYE and self employed and tearing my hair out trying to get QB to help with this. Everyone on customer service chat doesn't know the answer!

Thanks for joining this thread, singingwithkelly.

Let me help ensure you can properly record your income in QuickBooks. We’ll have to go to the Tax profile screen to accomplish this task.  

Before we proceed, allow me to share some information on how the program handles your PAYE income. When you add the income in your tax information, it will not affect the Tax Summary Report or income tax calculation. The program will only record it to track what happened in the actual business.

1. In QuickBooks Self-Employed (QBSE), head to the Gear icon in the upper right and select Tax profile under Taxes.
2. This will take you to the Tax settings screen.
3. From there, go to the Tax profile tab and enter the correct information for your taxes.
4. Go to the Estimated employment income field and enter your PAYE earnings.
5. Then fill in the remaining fields.
6. Click the Save button to keep the changes.

Here’s an article that will guide you on which categories to use to classify transactions in QBSE: About SA103F Categories.

For QuickBooks Online Payroll (QBOP), I recommend contacting our Payroll Support Team. They can guide you on how to input the income and make sure your taxes and forms are accurate.

1. In QuickBooks Online (QBO), navigate to the Help icon in the upper right to open the Search window.
2. Scroll down to the bottom of the screen and click the Contact Us menu.
3. Type a brief description of your concern in the field box and press Continue.
4. From the support options, pick Callback to speak with an agent or Chat to start a conversation.

You can browse this article to learn about our support hours and types: Contact Payroll.

Additionally, the following resource contains topics that will guide you on how to handle any payroll processes: QuickBooks Online Advanced Payroll hub. Click on the link to view the complete details of the article.

Keep in touch if you still need help with recording your income. I’ll be glad to assist further. Have a great rest of your day.

For those still having this issue and are looking for an accountants input please read below.

Quickbooks self-employed (QBSE) is only interested in your business expenses as a self-employed individual. As most freelancers are aware, and in recent years due to issues with COVID-19 etc. many have seen a need to seek additional employment streams.

When you receive income through a Payslip from a company, be it a short contract engagement, part-time job or temporary employment. You should not be recording this as Business income in Quickbooks Self-employed.

Instead, you should categorise it as either "Owners Deposits" or a "Transfer". This informs QBSE that the money is already accounted for from a tax position and will not include these in the reports or taxes section.

It is important to include the estimated tax from employment in the tax profile (as previous posts instruct) and is a good idea to update this with your P60/P45s once you receive them from your employer.

As QBSE does not include an option to include any tax already paid it is best to include the NET amount after tax for a more accurate tax estimate from QBSE.

QBSE is not a tax filing solution and therefore is not a reliable source for determining your tax position to HMRC. I would certainly recommend seeking an accountant to ensure you are reporting the correct details to HMRC on your Tax return.