Gross pay, deductions and net pay in the books
One payroll is owed to three parties: the employees, HMRC and the pension provider. Work out each share and the full cost.
Task 1From gross pay to net pay2 questions
Rowan Joinery employs three people and pays them monthly. Gross pay is what they earn before anything is taken off.
The employer holds back deductions from gross pay. What is left is net pay, which goes to the employees.
| Item | Amount |
|---|---|
| Gross pay | 6,000.00 |
| Income tax (PAYE) | 720.00 |
| Employees' National Insurance | 380.00 |
| Employees' pension contributions | 300.00 |
The employer passes the income tax and National Insurance on to HMRC, and the pension contributions on to the pension provider.
Task 2What the employer pays on top3 questions
Task 3Who is owed what4 questions