Liability for Employee Benefits - Current

Salaries, allowances, bonus and leave pay that have been earned but not yet paid at a reporting date are held here. The usual flow is a month-end Journal Entry that debits Salaries and Wages for the gross payroll, credits TDS Payable for tax withheld, and credits this ledger for the net amount due; the payday entry then debits this ledger and credits the bank. Dashain bonus declared in Ashwin but paid later is another example. The balance should return to zero after each payday; a lingering balance means a payment was posted to an expense instead of to this ledger. Benefits payable only after twelve months belong in the non-current partner.

Balance = Net salaries and benefits accrued - Amounts paid

1. 01Go to Invoicing > Journal Entry > New dated the last working day of the month.
2. 02Debit Salaries and Wages for the gross payroll; credit TDS Payable for tax and this ledger for the net.
3. 03Submit. The entry below posts.
4. 04On payday, post Invoicing > Journal Entry: Dr Liability for Employee Benefits - Current, Cr Bank.
5. 05Check the ledger on Financial Reports > General Ledger; it should be nil after payment.

Posted by Journal Entry when salaries are booked. Cleared by Payment Entry on payday and on SSF deposit.

Dr Salaries and Wages Rs 1,50,000, Cr Liability for Employee Benefits - Current Rs 1,50,000 for Shrawan salaries booked before payday.