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005-095 - Provision For Personal Leave and Holiday Pay

In this paper there are comments on the operation of the provision for Sick and Holiday Pay Account. The business should be concerned to ensure that an appropriate matching of revenue and expenses is occurring in the business entity for the preparation of financial accounts. Cost of labour is one o ...Read more
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In this paper there are comments on the operation of the provision for Sick and Holiday Pay Account. The business should be concerned to ensure that an appropriate matching of revenue and expenses is occurring in the business entity for the preparation of financial accounts.

Cost of labour is one of the most significant costs for most businesses, therefore the correct allocation of the liability accruing with each days work by all employees for sick and holiday pay should be reflected in the financial accounts if meaningful financial data is going to be prepared for use by management on an internal basis.

This paper discusses the operation of a Provision for Sick and Holiday Pay Account and includes comments on:

  • Why Provide For Sick And Holiday Pay?
  • Calculation Of Amount To Be Provided
  • Weekly Calculation
  • Journal Entry For Provision Of Sick And Holiday Pay
  • Payment Of Sick And Holiday Pay
  • Reconciliation Of Provision For Sick And Holiday Pay
  • Income Tax Treatment
  • Monitoring Of Amounts Owing