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Karen_b2b
Posts: 1
Registered: ‎07-09-2010
Australia
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Workers Compensation Premium entry

How do I enter a yearly Workers Compenstion Premium that is divided into installments

Thanks Karen

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Valued Partner
Kaye_Lait
Posts: 143
Registered: ‎12-01-2007
Australia

Re: Workers Compensation Premium entry

Hi Karen,

 

Would enter the whole invoice amount through Purchases, making sure to split the amount over 2 lines for the Stamp Duty component which does not GST in it and when the instalments are paid each month or quarter then use Pay Bills to apply the instalment payment against the invoice until it is cleared.  The GST will record on each instalment made in that period not on the whole invoice,  if you report on a Cash Basis.  It will also show you how much is left to pay.

 

Hope this helps

Kaye Lait
MYOB Certified Consultant / Certified Assessment & Workplace Trainer
Registered BAS Agent /Certificate IV Financial Services (Bookkeeping)
Member of Institute Certified Bookkeepers
Business Integrated Solutions Pty Ltd
PO Box 704, Arundel Qld 4214, Gold Coast
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Julie_A_C
Posts: 2,611
Registered: ‎07-09-2010
Australia
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Re: Workers Compensation Premium entry

[ Edited ]

This should really be recorded in your liabilities section of the Balance Sheet, as purchases are for trade creditors and not insurance and ATO liabilities.  You will usually find(90% of the time) that insurance funding by instalments is done by a financing company and therefore have an interest component.  The entry is therefore done via a general journal entry with the interest added to the liability and an unexpired interest account set up and the insurance amount put to prepaid expenses (an asset account).  You will also usually find that the instalments are 10 and not 12.  Therefore you have a entry set up for 10 repayments and you then need another entry set up to expense out the monthly insurance amount (12 entries). Your Accountant is the best person to advise you how the entries should be done.

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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Kaye_Lait
Posts: 143
Registered: ‎12-01-2007
Australia
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Re: Workers Compensation Premium entry

[ Edited ]

Julie,

 

Qld Workcover payments are generally not funded by a finance company.  It is an interest free arrangement made within Qld Workcover and the business and therefore it is not paid in advance by a finance company.  Therefore your suggestion that it is not a creditor is not correct in this case.  If however it was a normal insurance repayment scheme as you have suggested, which the business has signed an agreement with a finance company then your situation applies.

 

 

Kaye Lait
MYOB Certified Consultant / Certified Assessment & Workplace Trainer
Registered BAS Agent /Certificate IV Financial Services (Bookkeeping)
Member of Institute Certified Bookkeepers
Business Integrated Solutions Pty Ltd
PO Box 704, Arundel Qld 4214, Gold Coast
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Ultimate Partner
Julie_A_C
Posts: 2,611
Registered: ‎07-09-2010
Australia
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Re: Workers Compensation Premium entry

Thanks for that Kaye, didn't realise this was Qld workcover.  Over here in WA they get charged interest on the funding as it is not done by the insurer.

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)
Please use plain text.