Staff Secondment — Salary Recharged to Client
Recharging the salary cost of a seconded employee placed full-time with a client for a defined period.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accounts Receivable (Secondment Recharge) | Asset (+) | 8,000.00 | - |
| Secondment Revenue (Recharge) | Revenue (+) | - | 8,000.00 |
💡 Accountant's Note
When staff are seconded to a client on a cost-recharge basis, the salary is both an expense of the firm and a recharge to the client. The gross presentation — expense and revenue separately — is required if the firm remains the employer and bears employment risk.
Practitioner & Systems Framework
💻 ERP Architecture
During a secondment, the employee's salary remains on the firm's payroll (the firm is the employer of record and bears all employment risk — SSC, EOSB, leave entitlements). The firm recharges the salary cost (plus agreed markup, if any) to the client monthly. In the ERP, the salary expense is recognized in the normal payroll cycle; the recharge invoice is raised separately and recognized as secondment revenue. If the secondment is at cost with no markup, the P&L net effect is zero — expense and revenue equal. If there is a markup, the margin is the firm's income. For VAT purposes, secondment recharges are typically taxable supplies in most jurisdictions, including Jordan.
⚠️ Audit Flags
(1) Employer of record confirmation — is the firm truly the employer of record (paying SSC, EOSB, carrying insurance)? If the client effectively directs and controls the employee's work exclusively, there may be an employment law risk of the employee being reclassified as the client's employee. (2) Markup disclosure — is any markup on the secondment recharge disclosed to the client and agreed in writing? Undisclosed markup in a cost-recharge arrangement is a contractual risk. (3) VAT on secondment — in Jordan, secondment recharges are subject to GST; ensure the client invoice includes 16% GST on the recharged amount.
📄 Required Documentation
Secondment agreement (term, recharge basis, markup if any, obligations), payroll records for the secondee, secondment recharge invoices, GST documentation, SSC and EOSB accruals for the secondee, and employer of record confirmation.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.