Which Accounts to record unpaid salaries to Employees?

[Zhong Ayi]

Thanks for your help. I am doing lots of research on a split transaction.
It seems very easy to do but I am missing some small pieces here or there.
Can I confirm something with you? Should I see an Imbalance-HKD account
created after I create this split, or should I not have that Imbalanace-HKD
created?


On Tue, Apr 1, 2014 at 9:52 PM, Maf. King <maf at chilwell.net> wrote:

> On Tue 1 April 14 21:22:59 Zhong Ayi wrote:
> > Thanks for your advice. Actually I forgot about the social benefits. We
> are
> > in Hong Kong so it is relatively simple since we only have 2 things need
> to
> > pay: "Employee1 Salary" and "Employee1 Social Insurance". So there is no
> > tax or anything else (HK is great place to do business!). So even if we
> do
> > not pay Employee1 Salary this month, we still always pay the Social
> > Insurance to the government that month.
> >
> > OK I understand your idea about putting it in Liability:UnpaidSalary and
> I
> > like that idea for making separate for each employee, but then when it
> gets
> > to that monster split I fear about screwing up multiple places in my
> > accounts. There must be an easier way.... maybe I go back and treat each
> > employee from the beginning as a vendor and then treat their individual
> > social insurances (which always stay 5% of their salary) as another
> Expense
> > and/or Liability.... but then I guess that is the same thing as your idea
> > and eventually still need a monster split eh? Very confusing :(
> >
>
>
>
> Ok.  HK social insurance sounds like this will be straightforward, with not
> many splits needed.
>
> How about this:
> On "payment" day: (this is viewed from Expense:Salaries account)
>
> Gross Pay               Exp:Salaries    £100            -
> Social Insurance  Liab:SocIns           -       £5
> wages not paid    Liab:UnpaidSalary     -       £95
>
> Then at some point, you pay the government their 5%, a simple transfer from
> Bank to reduce the Liab:SocIns account (in the UK, I do that quarterly)
>
> Some time later, you can pay partial wages to the employee,  again, a
> transfer
> from Bank to reduce the Liab:UnpaidSalary
>
> When you eventually can pay wages at the correct time, the split I've shown
> above will be the same as shown, but the last line changed to "wages Paid
> Bank:current   -        80"
>
> HTH,
> Maf.
>
>
>
> > On Tue, Apr 1, 2014 at 6:19 PM, Maf. King <maf at chilwell.net> wrote:
> > > On Tue 1 April 14 16:55:00 Zhong Ayi wrote:
> > > > I am running GnuCash for a Business and so have many Business related
> > > > accounts. My business is running at a big loss and I need to record
> > > > salaries as a type of Account Payable because I need to record that I
> > > > owe
> > > > employees their salaries but I can not pay them now.
> > > >
> > > > Is the best way to record this type of transaction as a Account
> Payable
> > >
> > > and
> > >
> > > > treat employees as Vendors? How should I record in the future maybe a
> > > > partial payment to them if I start paying a little at a time, and
> what
> > > > do
> > > > you suggest I do as the months accumulate and their unpaid salaries
> also
> > > > increase? I am confused about what accounts these should best be
> placed
> > > > inside.
> > > >
> > > > Thank you for your keen ideas.
> > >
> > > Hi,
> > >
> > > How you handle this really depends on how your government requires that
> > > you
> > > account for employee taxes and other deductions. I can see that you
> would
> > > either handle deductions when the payment is actually made, or on the
> date
> > > that you "promise" the money to your employee.  (You could be deemed to
> > > make
> > > payment then, and the employee loans it straight back (less tax...))
> > >
> > > My advice is to get professional advice from an accountant who is
> familiar
> > > with your local rules.
> > >
> > > Having said that, in the UK, my instinct is to keep track using a
> > > spreadsheet
> > > outside of GC... (but I would have to check the tax position with my
> > > accountant!)
> > >
> > > IMHO, if you were to fudge this into GC, Vendors and A/P is not the way
> > > forward.  Just a normal liability account (Liability:UnpaidSalary -
> > > possibly 1
> > > subaccount per employee) is the way to set up within GC... but I'm not
> > > sure
> > > what you would use as a transfer account - probably something under
> > > Equity?
> > >
> > > Then when you eventually make payment, transfer from bank to
> > > expense:salary
> > > and liabilty to equity in a "multi-split monster" transaction.
> > >
> > > HTH,
> > > Maf.
>
> --
> Maf. King
> PGP Key fingerprint = 8D68 A91F 733B 2C1F 43B7  2B7C E591 E8E1 0DE7 C542
>
>
>
>