Accounting entries for sick leave

Correct documentary reflection in the accounting of the enterprise of operations related to the accrual of sick leave is of great importance. Accounting entries are made using the double-entry method, when each operation is simultaneously reflected in the debit of one account and the credit of another. They provide a balance of reflection, control over the flow of funds and form a stable practice for the accounting of sick leave. And this is, first of all, effective financial management for the enterprise. In this article, we will briefly define the basic rules for the accrual of sick leave and accounting entries.

Sick leave at the enterprise: rules for accrual and tax accounting

Each employee may face temporary disability and at the same time count on appropriate payments from the employer (the first 5 days) and the Pension Fund (the following days of illness). The rules for calculating them provide, firstly, for determining the calculation period, secondly, for calculating the average daily earnings, thirdly, for calculating the total amount of sick leave taking into account the insurance coefficient. The latter depends on the employee's length of service at the enterprise and the fact that he belongs to a vulnerable category of the population and can be from 50% to 100%, respectively.

Important! When calculating sick leave, days of leave without salary, due to pregnancy and childbirth, and military service are not taken into account.

Sick leave has specific taxation features that actually equate it to wages. In general, SSC, personal income tax and military service (military levy) must be systematically deducted from these amounts. By law, hospital benefits are taxed at the following tax rates:

• 18% personal income tax;
• 1.5% personal income tax;
• 22% social security tax (8.41% - in the case of accrual for persons with disabilities).

Accounting for sick leave: what accounts (sub-accounts) should be used?

Accruing sick leave requires the accountant to have a clear understanding of the rules for reflecting these transactions in accounting. As a rule, when accounting for such transactions, the following are used:

• Sub-account 663 (main for reflecting accrual and payment);
• Sub-account 378 (used for accounting for settlements with the PFU);
• Expense accounts 23, 91, 92, 93 and 94 (enterprise expenses for paying sick leave and tax amounts).

Sick leave must be reflected in various forms of reporting, which include Appendix 4DF, Appendix 1 and Appendix 5 to the Tax Calculation.

Main accounting entries for sick leave: general characteristics

Accounting for sick leave has its own characteristics, since payment is made from different sources (from the employer and the PFU, respectively). This requires the use of different accounting accounts, which are partially indicated above. Here are typical accounting entries for reflecting sick leave (suitable for both budgetary institutions and commercial enterprises):

• payment of the first 5 days (employer) - D 8011 and K 6511;
• payment from the 6th day of assistance (PFU) - D 2114 and K 6511;
• accrual of social security contributions - D 8012 and K 6313;
• withholding of personal income tax and health insurance (from the first 5 days) - D 6511 and K 6311;
• receipt of temporary disability benefits from the PFU - D 2314 and K 2114;
• payment of social security contributions - D 6313 and K 2313;
• payment of personal income tax and social security - D 6311 and K 2313;
• payment of sick leave to an employee - D 6511 and K 2314.

Accounting outsourcing for a company for sick pay: what can accountants of the Law Firm “Prikhodko and Partners” offer?

Accounting outsourcing can be the optimal solution for your company, ensuring that reporting complies with all legal requirements. Our accountants offer a comprehensive approach to accounting, transparency of reporting and professionalism. Below are the main services of our specialists.

Accounting for sick pay

1. full accrual cycle, starting from checking the correctness of the documents (e-sick pay) and ending with the calculation of the amount of payments;
2. correct differentiation of payments at the expense of the employer and the Pension Fund of Ukraine in accounting and reporting;
3. control over the timeliness of filing tax returns.

Preparation of accounting and tax reporting

1. formation and submission of necessary reports;
2. tax calculation and withholding of personal income tax, military duty and social security contributions from sick pay;
3. provision of professional tax consultations.

Maintaining personnel records of employees

1. assistance in the correct preparation and accounting of all documents, including medical reports, orders for accrual of sick leave;
2. making changes to personal files regarding periods of temporary incapacity for work and time sheets;
3. providing consultations on personnel issues.

The help of accountants for calculating sick leave and keeping records of it at the enterprise is a guarantee of your peace of mind and saving your time. Do you have any questions? Fill out the form below, find out the price of services and get a consultation from an accountant from the Law Firm “Prikhodko and Partners” today!