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Salary journal entries

Accountant


Dear All,


my salary statement has the following heads

Gross salary,Sp all,LOP,PF,ESI,Profession tax,net salary

 

when i want to book salary in tally , how should i do it ?

should i book in gross salary or in net salary ?

if in gross salary what is the entry to be passed ?


is it this entry ?

salary a/c dr (gross salary)

cr lop

cr profession tax

cr pf employees contribution

cr provision for salary (net salary)

if we book in net salary , is it this journal

salary a/c dr

cr provision for salary (net salary)

suppose if we book this way how will we book the pf employees contribition as liability and profession tax as liability ?

 

please help me on this regard.

 

 
Reply   
 
CA Final - Group II cleared

Hi John,

 

You have to pass a entry for GROSS SALARY.

All the deductions show as a 'LIABILITIES'. When your company will pay these amounts to respective bodies, then deduct liability created by that payment.

 

But I didn't get the logic why you wanna credit net salary to 'Provision for Salary'. Net salary directly go to Cash / Bank account. If you want to show 'Salary Payable' then simply pass journal entry as -

Salary Account  DR

to Salary Payable A/c.

 
Reply   
 



Entry for Salary Transaction should be done as per following:



At the time of Credit of Salary:


Basic Salary A/c         Dr.

HRA A/c                     Dr.

Trpotation Allowance   Dr.

Spl All                        Dr.

       To  PF A/c

       To ESIC A/c

       To Professional Tax A/c

       To TDS A/c             

       To Salary Payable A/c

_______________________________________


At the time of Payment:


Salary Payable  A/c  Dr

     To Cash/ Bank



Total thanks : 3 times

 
Reply   
 

At the time of credit of gross salary the entry is

                       salaries and wages a/c Dr

                                   To BAsic pay

                                   To Pf

                                    To ESi

  salaries and wages figure will directly goes to the prifit andv loss account to reduce pofit

                                               And

at the time of payment debit all credit items to cash or bank account

We sdould show the gross salary transations in the tally books

 
Reply   
 
MBA/M.Com. & GNIIT -F & A- Executive

Dear John,

I am agree with Rajesh

 
Reply   
 

I also agreed with Rajesh

 
Reply   
 
Accounts Executive


I agree with Rajesh

 
Reply   
 
Manager - Finance & Accounts

Hi John,

I agree with Mr Rajesh

 
Reply   
 

Hi Jhon,

Along with Mr. Rajesh.

 

 
Reply   
 

Basic Salary             Dr.

Allowances              Dr.

Company Contribution to EPF Dr.

Company Contribution to EPS

Administration Charges to PF DR.

Company contribution to ESIC Dr.

         To EPF Payable

         To EPS Payable

         To ESIC Payable

         To Professional Tax Payable

         To TDS Payable

          To Labour welfare fund Payable

        To Loan to Employee

          To Salary Advance to Employee

           To Rent Recovery 

           To Canteen Expense

          To Salary Payable


Total thanks : 1 times

 
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