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Simple payroll deduction question


#1

I was creating payroll items to which account i should categorize the following:

  1. “deduct employee salary because he/she didn’t come to office”
  2. " commissions to employee for getting better sales"
  3. ‘’ monthly allowance"

#2

for category 1 & 3 simply add it to earning items like bonus (commissions) or you can just write it as ‘commissions’ and monthly allowance.
for category 2 add it to deduction items as penalty or whatever you want to call it


#3

i guess u wanted to mention in the opposite way.

and i would like know which account category i should mention them for ex: asset or income or expense or liability or etc?


#4

As a general rule, every payroll item is an expense unless you are deducting amount because it’s to be paid to third-party (e.g. payroll tax) which in that case it would a liability.


#5

i want to deduct the salary because my employee is not coming to office daily or too many sick leaves or some other reason.
for suppose if monthly salary is 20000 RS and if he/she not coming to office for 5 days (2 days are allowed as sick leave per month but remaining 3 days are extra leaves)

so for those 3 days extra leave i want to deduct Rs 1428 .
under which account i have to categorize this 1428 amount


#6

@raj_nann, you need to think carefully about how your categorize such things. You used the term deduct. But in accounting, a deduction usually applies to taxes and implies an expense. You had no expense, because you are deducting unearned pay from normal salary. So from the business’s perspective, this is not a deduction. You have merely avoided an expense.

Often, this would be accounted for by recording fewer hours or days worked for the employee. Thus, you would owe them less money. But if they are on a fixed salary, you might want to record the extra leave as a separate, negative line item on a payslip.