There are so many expenditures which are incurred in respect of the employees of the business firm which are neither official nor personal; even then these are booked as business expenditure. For example:- Tea and refreshment expenses for the employees, medical expenses for the health of the employees or their family members, uniforms given to employees, concessional foods given to employees, personal accident insurance premium paid for employees etc. For control purpose, the sub heads may be created under staff welfare expense like tea & refreshment expenses, medical expenses, personal accident expenses, uniform expenses etc.

Accounting Treatment of Staff Welfare Expenses

Expenses paid by cash or by cheque:-

Type of voucher to be prepared:- Cash or Bank payment voucher

Entry to be passed

Debit:–  Staff Welfare Expenses Account

Credit:-     Cash Account or Bank Account

Treatment of Staff Welfare Expenses in Final Accounts

The staff welfare expenses are shown in expenses side of profit and loss account since these are indirect expenses.