Page 209 - Microsoft Word - 00 BA3 IW Prelims STUDENT.docx

Accounting for payroll

2.2 Pension contributions

Many employees contribute to pension schemes by allocating a percentage of their
gross pay to the pension fund e.g. 5 or 6 per cent of their weekly or monthly
earnings.

Illustration 2

Lesley earns $200 gross in week 21. Pension contributions are 5 per cent of
weekly salary. The ledger entries to record this are as follows:

Debit Wages payable $10

Credit Pension liability $10

203