Employee contribution (epf)

This query is : Resolved

Chiranjeevi Chintala (Querist)
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08 October 2013 Sir,

1. is Epf allowed as expenditure or not?
2. If Epf not allowed as expenditure, how to pass journal entry in books of accounts

Eg: Gross salary Rs.1,00,000/-
Salary advance 10000
Epf Rs.2500/-

A)Salary A/c.....1,00,000

To Advance 10000
To Epf payable(liablity) 2500
To salary payable 87500

(if epf allowed as expenditure)

B) If need not allowed as expenditure how to pass journal entry. please reply

Nikhil Kaushik

Nikhil Kaushik (Expert)
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08 October 2013 1. Employer's contribution to EPF will be allowed as an expenditure.

@VaibhavJ

@VaibhavJ (Expert)
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08 October 2013 Hi

EPF (Employer Contri.) is Expense.

Entry is:

EPF (Employer Contri.) Exp A/c Dr..
...To EPF (Employer Contri.) Liability A/c

While Making Payment of EPF..

EPF (Employer Contri.) Liability A/c Dr..
..To Bank A/c.

Thanks//VaibhavJ

@VaibhavJ

@VaibhavJ (Expert)
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08 October 2013 In your case entry will be..

Gross Salary A/c ..100000
EPF (Employer Contri.) Exp A/c.. 2500
..To Advance A/c..10000
..To EPF (Employer Contri.) Liability A/c..2500
..To EPF (Employee Contri.) Liability A/c..2500
..To Salary Payable A/c ..87500

Thanks

Sanket

Sanket (Expert)
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08 October 2013 As per my opinion you should book your
Providend Fund entries this way.
1) Booking of salary & deduction of
Provident Fund form that.
Salary A/c Dr.
To Employee A/c Cr.
To Provident Fund (Employees
Contribution) A/c Cr.
2) At the time of Provident Fund
depositing to Bank which was collected
from employees
Provident Fund (Employer Contribution)
A/c Dr.
Provident Fund (Employees
Contribution) A/c Dr.
To Bank or Cash A/c Cr.
[After this entry Provident Fund
(Employees Contribution) A/c will be
ZERO]
3) Employer contribution to be transfer
to Profit & Loss Account as this is the
expenses for the organization.
Profit and Loss Account Dr.
To Provident Fund (Employer
Contribution) A/c Cr.

Chiranjeevi Chintala

Chiranjeevi Chintala (Querist)
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09 October 2013 Thank you and Thanks to all for reply

Message likes : 1 times

@VaibhavJ

@VaibhavJ (Expert)
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09 October 2013 Thanks for Acknowledgement!

Chiranjeevi Chintala

Chiranjeevi Chintala (Querist)
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09 October 2013 Employer Contribution is allowed as expenditure. its clear, but in case of Employee contribution (PF) is allowed as expenditure or not?

@VaibhavJ

@VaibhavJ (Expert)
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09 October 2013 Employee Contribution is not expense of company.

Its is deduction from salary hence liability of company.

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