Could anyone please tell me the accounting entry for government incentive payment received for new staff?

Answer 1

Under IAS 20 Accounting for Government Grants and Disclosure of Government Assistance says, under

Presentation of Grants Related to Income

29. Grants related to income (as opposed to assets) are sometimes presented as a credit in the income statement, either separately or under a general heading such as "Other income"; alternatively, they are deducted in reporting the related expense.
30. Supporters of the first method claim that it is inappropriate to net income and expense items and that separation of the grant from the expense facilitates comparison with other expenses not affected by a grant. For the second method it is argued that the expenses might well not have been incurred by the enterprise if the grant had not been available and presentation of the expense without offsetting the grant may therefore be misleading.
31. Both methods are regarded as acceptable for the presentation of grants related to income. Disclosure of the grant may be necessary for a proper understanding of the financial statements. Disclosure of the effect of the grants on any item of income or expense which is required to be separately disclosed is usually appropriate.

What this means for you is you can either choose to disclose what you received from the govt under "other income" or another preferred description, or you can knock it off the new staff salaries.

Disclosure requirements

39. The following matters should be disclosed:

(a) the accounting policy adopted for government grants, including the methods of presentation adopted in the financial statements;

(b) the nature and extent of government grants recognised in the financial statements and an indication of other forms of government assistance from which the enterprise has directly benefited; and

(c) unfulfilled conditions and other contingencies attaching to government assistance that has been recognised.

Answer 2

Tax free income?
Treat like other miscellaneous income with separate account for tax purposes.