Vacation pay expense
/What is Vacation Pay Expense?
Vacation pay expense is a general ledger account in which is recorded the amount of vacation pay earned by employees. The amount in the account is updated at the end of each reporting period to reflect the additional expense generated as a result of employee time worked during the period.
Presentation of Vacation Pay Expense
Vacation pay expense is quite a small part of the overall compensation expense recorded by a business, so it usually does not appear in a separate line on the income statement. Instead, it is aggregated into the general compensation expense line item. An alternative treatment is to report it within the employee benefits line item on the income statement.