I have a question regarding advance salary and how this should be recorded in the bookkeeping (gross or net)?
An employee received a bonus in 2019 of CHF 33,725 (that is the amount paid out of the bank) on top of his monthly gross salary of CHF10,552.
The employee asked if it can be booked as advance salary as the tax at source would have been too large
The agreed split was 6 monthly amount x CHF 5,000 and the balance in 7th month
Month 1 deductions were:
Gross: CHF 15,552 (i.e. 10,552 + 5,000)
Kid allowance: CHF 600
Total: CHF 16,152
AHV: CHF (797)
ALV: CHF (171)
Tax: CHF (864)
BVG: CHF (261)
Net: CHF 14,059
The previous accountant of this company booked (incorrectly) this bonus as a net amount instead of gross. I believe the gross amount in 2019 should be approx. CHF 35,880.
Secondly, the client may have a problem with the Ausgleichkasse as only a bonus of CHF 30,000 was declared as salary in 2019, instead of the gross of 35,880 + annual basic wage...
Thirdly, I do not understand how the advance salary was booked:
1142 31/7/2019 Salary advance 33,725.21DR
1142 2/8/2019 Salary advance repayment July 4,058.80CR
1142 31/8/2019 Salary advance repayment August 4,058.80CR
1142 30/9/2019 Salary advance repayment Sept 4,058.80CR
1142 31/10/2019 Salary advance repayment October 4,070.90CR
1142 30/11/2019 Salary advance repayment November 4,078.00CR
1142 23/12/2019 Salary advance repayment December 4,078.00CR
1142 31/01/202 Salary advance repayment January 2,835.62CR
Leaving a debit balance of 6,486.29.
I do not understand this balance or how to correct it. Maybe someone can assist me please.
I found that the net salary on the amount of CHF 10,552 is equal to 10,000 so I think the accountant booked the net amount above the 10,000 as a reimbursement of the advance.