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Contributing Cover User EVM
Contributing Cover User
EVM
Posts: 7
Registered: ‎30-03-2011
Australia
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How to account for salary Advances?

My employer pays his staff advances during the month these are paid back from the next pay.

I need advice on how to keep track of the advances and repayments; I have set up a 'Employee Salary Advance' account but if I allocate an advance to that acc it does not appear in the employees wages.

There must be a simple way to handle this - how to link this accs in the payroll categories of 'Advance' and 'Advance Repayment'?

OR, should I have only one Payroll Category say 'Advance/Repayment' and enter both advance and the repayment (as a negative amt) in the same acc?

Thank you

Cheers

EVM

 

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Ultimate Partner
Julie_A_C
Posts: 2,560
Registered: ‎07-09-2010
Australia

Re: How to account for salary Advances?

Hopefully you have set up the employees staff advance account in your assets.

 

Naturally it does not appear in their wages as it is not a wage it is an advance.  It will be recorded in wages when you record the wage.

 

The 'wage' advance should be overriding the default expense account and be linked to the asset account-employees advances.

 

You can use this as both the giving and taking (with a minus sign) of the advance but it would be better to use deductions-advance repayment for the repayment linked to the same asset account as then the minus sign will not be missed.

 

Make sure you exempt the advance from super calculations and the advance and repayment from the PAYG calculations.

 

Make sure at the end of the year that you do not include the advance in the payment summary figure for wages.

Julie Carter AIPA, BBus(Acctg),
MYOB Professional Partner, Registered BAS Service Provider
Associate Member of Institute of Public Accountants
ph: 0417 927 654 email: accuratebooks7@gmail.com
Accurate Books Always (Servicing from Leederville to Pinjarra, Fremantle to Armadale WA)
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Contributing Cover User EVM
Contributing Cover User
EVM
Posts: 7
Registered: ‎30-03-2011
Australia
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Re: How to account for salary Advances?

Thanks Julie, Yes the advance acc is an asset account.

I'll give this a go and see how it works!

Your help is greatly appreciated

Cheers

EVM

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