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.
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.
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.
- Click the Gear icon.
- Select Tax Profile under Taxes.
- Go to the Estimated employment income field and enter your PAYE earnings.
- Click Save.
This is how it should look like:
I'll be around if you have other questions.
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 ???
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
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!
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.
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
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.
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.