Is it necessary to change the following in red ????
Go to the Payroll command centre and click Payroll Categories.
In the Wages tab, click the zoom arrow beside the Holiday Pay wage category. The Wages Information window appears.
If you report payroll information to the ATO through Single Touch Payroll, select the applicable ATO Reporting Category. Typically this will be the same ATO Reporting Category you've selected for your Base Hourly or Base Salary wage categories. Learn more about assigning ATO reporting categories for Single Touch Payroll reporting.
Select the Override Employees' Wage Expense Account option.
Click the drop-down arrow beside the Override Account field and select the appropriate account. If you choose a liability account, a warning will appear advising that the linked account should be an expense account. Disregard the warning. See our example below.
Rather can I just leave it in the wage expense account.
As has been indicated, overriding that wage expense account on the linked wage categories is recommended as it will reduce the balance of that liability account when that leave is paid out. As this does reflect what is happened in real life i.e. paying that leave out as reduced the liability of the business.
A real-world example would be to say my leave liability sits at $200. My employee is being paid $20 an hour for 8 hours of annual leave ($160). If I pay that out to the leave, my liability is reduced 160. When you have that override option set up it will automatically reduce that liability to be $40 after the pay. If it wasn't set up it would remain at $200 even though I have paid it out.
Now, in theory, you don't have to override that expense account and rely solely on journal entries to manage the leave liability. However, it's not the best practice as it doesn't accurately reflect that leave liability in real-time as you could have paid it out but not updated the leave liability account.
You also mentioned annual leave and long service leave is one amount. There is nothing stopping the user from setting it up like this or with multiple setups one for each leave type. It's solely how you wish to capture that information and report on it.
If you're tracking leave accruals as liabilities, then this account needs to be changed to a liability account as per the steps in the help article as it will reduce the account balance when you pay the liability. If it's set to a wage expense account, paying the leave will not reduce the account balance.
Let us know if you have additional questions on this.
If you are referring to STP reconciliation for the EOFY, this doesn't involve the liability or expense accounts so won't be affected. STP reconciliation is based on payroll categories and ATO reporting categories.
Additionally, you do need to follow Step 5 Regularly update your accrued liabilities in that linked help article to ensure your expense and liability accounts have the correct values.
Looking for something else?
Search the Community Forum for answers or find your topic and get the conversation started!
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Hi All,
I have been asked to set up our leave accuals as liabilities.
Is it necessary to change the following in red ????
Go to the Payroll command centre and click Payroll Categories.
In the Wages tab, click the zoom arrow beside the Holiday Pay wage category. The Wages Information window appears.
If you report payroll information to the ATO through Single Touch Payroll, select the applicable ATO Reporting Category. Typically this will be the same ATO Reporting Category you've selected for your Base Hourly or Base Salary wage categories. Learn more about assigning ATO reporting categories for Single Touch Payroll reporting.
Select the Override Employees' Wage Expense Account option.
Click the drop-down arrow beside the Override Account field and select the appropriate account. If you choose a liability account, a warning will appear advising that the linked account should be an expense account. Disregard the warning. See our example below.
Rather can I just leave it in the wage expense account.
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Hi All,
I have been asked to set up our leave accuals as liabilities.
Is it necessary to change the following in red ????
Go to the Payroll command centre and click Payroll Categories.
In the Wages tab, click the zoom arrow beside the Holiday Pay wage category. The Wages Information window appears.
If you report payroll information to the ATO through Single Touch Payroll, select the applicable ATO Reporting Category. Typically this will be the same ATO Reporting Category you've selected for your Base Hourly or Base Salary wage categories. Learn more about assigning ATO reporting categories for Single Touch Payroll reporting.
Select the Override Employees' Wage Expense Account option.
Click the drop-down arrow beside the Override Account field and select the appropriate account. If you choose a liability account, a warning will appear advising that the linked account should be an expense account. Disregard the warning. See our example below.
Rather can I just leave it in the wage expense account.
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Reading the following link: 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background-size: contain;\n background-position: center;\n}\n.myob-social-links .twitter a:before {\n background: url(\"data:image/svg+xml;charset=utf8,%3Csvg xmlns='http://www.w3.org/2000/svg' viewBox='0 0 24 24'%3E%3Ctitle%3EAsset 6%3C/title%3E%3Cg id='Layer_2' data-name='Layer 2'%3E%3Cg id='Layer_1-2' data-name='Layer 1'%3E%3Cpath d='M12,0A12,12,0,1,0,24,12,12,12,0,0,0,12,0Zm5.33,10c0,.12,0,.23,0,.35A7.75,7.75,0,0,1,5.4,16.92a5.48,5.48,0,0,0,4-1.13A2.73,2.73,0,0,1,6.89,13.9a2.73,2.73,0,0,0,1.23,0,2.73,2.73,0,0,1-2.19-2.67v0a2.73,2.73,0,0,0,1.23.34,2.73,2.73,0,0,1-.84-3.64,7.74,7.74,0,0,0,5.62,2.85,2.76,2.76,0,0,1-.07-.62,2.73,2.73,0,0,1,4.72-1.86,5.49,5.49,0,0,0,1.73-.66c-.2.64-.23.87-.79,1.21a1.46,1.46,0,0,0,1.34,0A5.8,5.8,0,0,1,17.33,10Z' style='fill:%23687480'/%3E%3C/g%3E%3C/g%3E%3C/svg%3E\")\n no-repeat;\n}\n\n.myob-social-links .googleplus a:before {\n background: url(\"data:image/svg+xml;charset=utf8,%3Csvg xmlns='http://www.w3.org/2000/svg' viewBox='0 0 24 24'%3E%3Ctitle%3EAsset 4%3C/title%3E%3Cg id='Layer_2' data-name='Layer 2'%3E%3Cg id='Layer_1-2' data-name='Layer 1'%3E%3Cpath d='M12,0A12,12,0,1,0,24,12,12,12,0,0,0,12,0ZM9,17.5a5.5,5.5,0,1,1,4.1-9.17L11.61,9.67a3.5,3.5,0,1,0,.56,3.84H9v-2h4.47a1,1,0,0,1,1,1.11A5.49,5.49,0,0,1,9,17.5Zm10.5-4v2h-2v-2h-2v-2h2v-2h2v2h2v2Z' style='fill:%23687480'/%3E%3C/g%3E%3C/g%3E%3C/svg%3E\")\n no-repeat;\n}\n\n.myob-social-links .facebook a:before {\n background: url(\"data:image/svg+xml;charset=utf8,%3Csvg xmlns='http://www.w3.org/2000/svg' viewBox='0 0 24 24'%3E%3Ctitle%3EAsset 1%3C/title%3E%3Cg id='Layer_2' data-name='Layer 2'%3E%3Cg id='Layer_1-2' data-name='Layer 1'%3E%3Cpath d='M12,0A12,12,0,1,0,24,12,12,12,0,0,0,12,0Zm3.51,12H13.2v7.2h-3V12H8.4V9.58h1.8V8.29A2.61,2.61,0,0,1,13,5.4h2.6V7.77H13.81a.58.58,0,0,0-.61.66V9.58h2.56Z' style='fill:%23687480'/%3E%3C/g%3E%3C/g%3E%3C/svg%3E\")\n no-repeat;\n}\n\n.myob-social-links .linkedin a:before {\n background: url(\"data:image/svg+xml;charset=utf8,%3Csvg xmlns='http://www.w3.org/2000/svg' viewBox='0 0 24 24'%3E%3Ctitle%3EAsset 5%3C/title%3E%3Cg id='Layer_2' data-name='Layer 2'%3E%3Cg id='Layer_1-2' data-name='Layer 1'%3E%3Cpath d='M12,24A12,12,0,1,0,0,12,12,12,0,0,0,12,24Zm1.82-10.71a1.2,1.2,0,0,0-1.2,1.2v4.2h-3s0-7.2,0-7.8h3v.89A3.72,3.72,0,0,1,15,10.91c1.78,0,3,1.29,3,3.78v4H15v-4.2A1.2,1.2,0,0,0,13.82,13.29ZM6.91,9.69h0A1.47,1.47,0,0,1,5.4,8.2,1.44,1.44,0,0,1,6.93,6.75a1.47,1.47,0,1,1,0,2.94Zm1.51,9h-3v-7.8h3Z' style='fill:%23687480'/%3E%3C/g%3E%3C/g%3E%3C/svg%3E\")\n no-repeat;\n}\n\n.myob-social-links .instagram a:before {\n background: url(\"data:image/svg+xml;base64,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\")\n 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Tracking Leave Accruals as Liabilities","moderationData":{"__ref":"ModerationData:moderation_data:690919"},"body":"
If you're tracking leave accruals as liabilities, then this account needs to be changed to a liability account as per the steps in the help article as it will reduce the account balance when you pay the liability. If it's set to a wage expense account, paying the leave will not reduce the account balance.
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Let us know if you have additional questions on this.
If you're tracking leave accruals as liabilities, then this account needs to be changed to a liability account as per the steps in the help article as it will reduce the account balance when you pay the liability. If it's set to a wage expense account, paying the leave will not reduce the account balance.
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Let us know if you have additional questions on this.
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Thanks - question is this going to cause a problem with reconciling wages paid for the end of financial year reconciliation ?
If you are referring to STP reconciliation for the EOFY, this doesn't involve the liability or expense accounts so won't be affected. STP reconciliation is based on payroll categories and ATO reporting categories.
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Additionally, you do need to follow Step 5 Regularly update your accrued liabilities in that linked help article to ensure your expense and liability accounts have the correct values.
If you are referring to STP reconciliation for the EOFY, this doesn't involve the liability or expense accounts so won't be affected. STP reconciliation is based on payroll categories and ATO reporting categories.
\n
\n
Additionally, you do need to follow Step 5 Regularly update your accrued liabilities in that linked help article to ensure your expense and liability accounts have the correct values.
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As has been indicated, overriding that wage expense account on the linked wage categories is recommended as it will reduce the balance of that liability account when that leave is paid out. As this does reflect what is happened in real life i.e. paying that leave out as reduced the liability of the business.
A real-world example would be to say my leave liability sits at $200. My employee is being paid $20 an hour for 8 hours of annual leave ($160). If I pay that out to the leave, my liability is reduced 160. When you have that override option set up it will automatically reduce that liability to be $40 after the pay. If it wasn't set up it would remain at $200 even though I have paid it out.
\n
\n
Now, in theory, you don't have to override that expense account and rely solely on journal entries to manage the leave liability. However, it's not the best practice as it doesn't accurately reflect that leave liability in real-time as you could have paid it out but not updated the leave liability account.
\n
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You also mentioned annual leave and long service leave is one amount. There is nothing stopping the user from setting it up like this or with multiple setups one for each leave type. It's solely how you wish to capture that information and report on it.
As has been indicated, overriding that wage expense account on the linked wage categories is recommended as it will reduce the balance of that liability account when that leave is paid out. As this does reflect what is happened in real life i.e. paying that leave out as reduced the liability of the business.
A real-world example would be to say my leave liability sits at $200. My employee is being paid $20 an hour for 8 hours of annual leave ($160). If I pay that out to the leave, my liability is reduced 160. When you have that override option set up it will automatically reduce that liability to be $40 after the pay. If it wasn't set up it would remain at $200 even though I have paid it out.
\n
\n
Now, in theory, you don't have to override that expense account and rely solely on journal entries to manage the leave liability. However, it's not the best practice as it doesn't accurately reflect that leave liability in real-time as you could have paid it out but not updated the leave liability account.
\n
\n
You also mentioned annual leave and long service leave is one amount. There is nothing stopping the user from setting it up like this or with multiple setups one for each leave type. It's solely how you wish to capture that information and report on it.
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