20 April 2010
What is the entry incase of PF-Employer contribution. 1.it is also a part of salary or it should be shown separately. if it is a part of salary then the following entry in correct na salary a/c dr to salary payable a/c dr to pf-employee share to pf-employer share if the above entry is not correct tell me hte correct one.
(1) SALARIES: salary a/c Dr (Exclude PF & ESI of Mgmt and Employees) House rent allowance Dr Conveyance allowance Dr Medical allowance Dr To salary payable Cr
(2) RECOVERIES FROM EMPLOYEES: Salary Payable Dr To EPF-employee share Cr To ESI-employee share Cr
(3) MANAGEMENT CONTRIBUTIONS: PF & ESI Contributions Dr To EPF-employer's share Cr To ESI-employer's share Cr
Intention: Management contributes its share of PF & ESI from out of its (Mgmt) revenues but not by effecting recovery from employees
20 April 2010
Suppose someone's Salary is Rs. 50,000/- p.m.
P.F. Eployer as well as employee cont. is 12% each of Basic and D.A. so let it be 2,400/- for employer as well as cont. each.
But employer cont. of P.F. is not included in above Rs. 50,000/-
there is TDS deduction of Rs. 2,000/- and Professional Tax of Rs. 200/-
Then Accounting Entry will be:
Employer's cont. to PF Dr. 2400 Salary & Wages of Mr. X Dr. 50000 Salary & Wages Payable Cr. 45400 Employer Cont. to PF Payable Cr. 2400 Employee Cont. to PF Payable Cr.2400 TDS Payable(Salary) Cr. 2000 Prof. Tax Payable Cr. 200
When PF is deposited : Employer Cont. to PF Payable Dr. 2400 Employee Cont. to PF Payable Dr. 2400 PF Payable Account Cr. 4800 And PF Payable Account Dr. 4800 Bank Cr. 4800
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