The 2011 Federal Budget included a perk for small businesses that saw an increase in EI premiums in 2011. The hiring credit of up to $1,000 is automatically calculated by Canada Revenue Agency once your 2011 T4s are filed.
Now that you have received this credit how do you account for it in the books?
The options are to reduce your EI premium expense or include the credit as income in the year received. My preference is the latter. To account for this in your books the general journal entry is a Debit to Payroll Liabilities and a Credit to Other Income.