WSIB Employer Advances

by Donna, dsbookkeepingatrogersdotcom
(Ottawa, Ontario)

The company has been reimbursed by WSIB for wages we paid an injured worker. Where should I code this reimbursement on the credit side. It can't be wages, but for the life of me I can't figure out where I should put it.

Donna, correct me if I am wrong ... I believe how WSIB works is if an employee is off work from a work related injury, then the employer continues to pay the employee's wage while on leave .... and WSIB reimburses the employer for the advanced wages while on leave.

It is my understanding that normally all reimbursements are coded to an income account called something like "Expense Reimbursements". Many people like to net these against expenses but I believe GAAP states they should be recorded as income.

This means your entry would be:

DEBIT Cash in Bank (a current asset on your balance sheet)
CREDIT Expense Reimbursement (an income account on your income statement)

I'd love to hear from others as to how they would record this transaction.

You may also want to determine if CPP, EI and FWT are affected as the wages may now be a tax free benefit to the employee.