Work clothes, also called work clothes, are issued by many companies to their employees. But how should work clothes be accounted for? In practice, do work clothes belong to labor insurance or welfare expenses? The accounting and tax treatment of work clothes seems to have always been controversial. Today we will talk about this topic together. 
1. Welfare fees and labor insurance premiums The difference:
1. Labor insurance premiums are necessary protective supplies for production and operation, while welfare fees are universal daily necessities;
2. Labor insurance premiums must be in kind, and welfare fees are both It can be in kind or in cash;
3. For the special VAT invoices obtained, the VAT can be deducted when used as labor insurance premiums, but the VAT cannot be deducted when used as welfare fees, and must be transferred out as input items. ;
4. Labor insurance premiums can be paid 100% according to the actual situation and do not need to be incorporated into wages to pay personal income tax. However, the pre-tax deduction of welfare fees is limited to 14% of total wages and needs to be incorporated under different circumstances. Salaries are subject to personal income tax.
2. Scope of labor premium expenditure:
1. Due to work needs;
2. Equipped or provided for its employees;
3. Limited to physical items such as work clothes, gloves, safety protection supplies, heatstroke prevention and cooling supplies.
3. Tax Policy
In accordance with the provisions of Article 2 of the “Announcement of the State Administration of Taxation on Several Issues Concerning Corporate Income Tax” (State Administration of Taxation Announcement No. 34, 2011), enterprises shall According to Article 27 of the Implementation Regulations of the Enterprise Income Tax Law, the cost of work clothing that is uniformly produced by the enterprise and required to be uniformly worn by employees when working can be deducted before tax as a reasonable expense of the enterprise.
To sum up, it can be seen from Document No. 34 that the General Administration does not define this kind of work clothes as labor insurance or welfare benefits, but is a kind of work clothes that is different from labor insurance or welfare benefits. A reasonable expenditure for labor insurance and welfare expenses, which is allowed to be deducted before tax. With the development of the market economy and the improvement of people’s living standards, corporate workwear is not all coarse cloth clothing purchased in labor protection supply stores. In particular, banks, airports, hotels and other companies purchase suits as uniform workwear, which requires a large amount of expenditure. If it is used as a welfare The fee is limited to 14% of the total salary and cannotbe deducted according to the actual situation. The tax law here does not stipulate specific expenditure standards. As long as the reasonable labor insurance expenditures incurred by the enterprise can be reported according to the actual situation, it is in line with the characteristics of the times. We taxpayers no longer need to worry about whether it should be attributed to labor insurance or welfare expenses. As long as it actually occurs and reasonable receipts are obtained, it can be deducted according to the facts.
