Our staff are all on hourly pay, so their holiday pay is paid in addition to wages rather than as part of their fixed salary.
We are now 6 months into the year, but staff haven’t taken all the entitlement they have earned so we have have an amount that we owe them. Is there anywhere on Quickfile that we can show this so we know from our P&L how much the potential liability is?
Whilst we keep a spreadsheet record, it would be useful to show it on accounting software.
Any answers would be appreciated,
You can create new codes for it in P&L and Balance sheet if you like
Thanks. For the journal, would we debit the Gross Wages and Credit a new Holiday Pay category?
You can or create Holiday pay as category in P&L if you like for Dr
If you want to account for holiday pay when it is accrued rather than when it is taken then you’d create a P&L code for holiday pay cost and a balance sheet code for holiday pay accrued. You’d then debit the cost account and credit the balance sheet account when someone accrues holiday pay.
When they take holiday and you pay the accrued pay out, that would credit net pay and debit the balance sheet holiday pay account - you have already recognised the cost when the pay was accrued so you don’t want to debit P&L again when the holiday is taken.
Thanks Ian, very helpful.
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