ESI and PF Entries in Tally
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
22 January 2010
Hi,
I want to know the ESI % for employee and employer contribution and PF % and how topass accounting entries for the same in Tally.
I want to know the ESI % for employee and employer contribution and PF % and how topass accounting entries for the same in Tally.
22 January 2010
Salary A/C dr
To Salary Payable
To PF
To ESI
When make payment nullify these accounts and give corrousponding effect to Bank/cash
To Salary Payable
To PF
To ESI
When make payment nullify these accounts and give corrousponding effect to Bank/cash
Message likes :
1 times
24 July 2024
Sure, let's break down the Employee State Insurance (ESI) and Provident Fund (PF) contributions and how to pass accounting entries for these in Tally ERP.
### Employee State Insurance (ESI)
**ESI Contribution Rates (as of the latest information, subject to updates):**
- **Employee Contribution:** 0.75% of gross wages per month
- **Employer Contribution:** 3.25% of gross wages per month
### Provident Fund (PF)
**Provident Fund Contribution Rates (as of the latest information, subject to updates):**
- **Employee Contribution:** 12% of basic wages, dearness allowance, and retaining allowance (if any)
- **Employer Contribution:**
- 3.67% towards Provident Fund
- 8.33% towards Pension Scheme (EPS)
- 0.5% towards Employee Deposit Linked Insurance (EDLI)
### Accounting Entries in Tally ERP
#### 1. Employee State Insurance (ESI)
**For Employer Contribution (3.25% of gross wages):**
1. **Create Ledger Accounts:**
- **ESI Payable (Expenses Account)**
- **ESI Employer Contribution (Statutory Liability)**
2. **Pass Accounting Entries:**
- Debit **ESI Payable (Expenses Account)** (e.g., Salary Expenses) for the Employer Contribution amount.
- Credit **ESI Employer Contribution (Statutory Liability)** (e.g., Duties and Taxes) for the same amount.
**For Employee Contribution (0.75% of gross wages):**
1. **Create Ledger Accounts:**
- **ESI Payable (Expenses Account)**
- **ESI Employee Contribution (Employee Deduction)**
2. **Pass Accounting Entries:**
- Debit **ESI Payable (Expenses Account)** (e.g., Salary Expenses) for the Employee Contribution amount.
- Credit **ESI Employee Contribution (Employee Deduction)** (e.g., Employee Benefits Payable) for the same amount.
#### 2. Provident Fund (PF)
**For Employer Contribution:**
1. **Create Ledger Accounts:**
- **PF Payable (Expenses Account)**
- **PF Employer Contribution (Statutory Liability)**
2. **Pass Accounting Entries:**
- Debit **PF Payable (Expenses Account)** (e.g., Salary Expenses) for the Employer's Contribution amount.
- Credit **PF Employer Contribution (Statutory Liability)** (e.g., Duties and Taxes) for the same amount.
**For Employee Contribution:**
1. **Create Ledger Accounts:**
- **PF Payable (Expenses Account)**
- **PF Employee Contribution (Employee Deduction)**
2. **Pass Accounting Entries:**
- Debit **PF Payable (Expenses Account)** (e.g., Salary Expenses) for the Employee's Contribution amount.
- Credit **PF Employee Contribution (Employee Deduction)** (e.g., Employee Benefits Payable) for the same amount.
### Important Notes:
- Adjust the ledger account names as per your Tally ERP configuration and naming conventions.
- Ensure you classify and allocate the contributions correctly between liabilities (payables) and expenses (statutory liabilities) for accurate financial reporting.
- It's advisable to consult with your accountant or financial advisor to tailor the entries based on specific statutory requirements and company policies.
By following these guidelines, you can accurately record ESI and PF contributions in Tally ERP, ensuring compliance and proper financial management.
### Employee State Insurance (ESI)
**ESI Contribution Rates (as of the latest information, subject to updates):**
- **Employee Contribution:** 0.75% of gross wages per month
- **Employer Contribution:** 3.25% of gross wages per month
### Provident Fund (PF)
**Provident Fund Contribution Rates (as of the latest information, subject to updates):**
- **Employee Contribution:** 12% of basic wages, dearness allowance, and retaining allowance (if any)
- **Employer Contribution:**
- 3.67% towards Provident Fund
- 8.33% towards Pension Scheme (EPS)
- 0.5% towards Employee Deposit Linked Insurance (EDLI)
### Accounting Entries in Tally ERP
#### 1. Employee State Insurance (ESI)
**For Employer Contribution (3.25% of gross wages):**
1. **Create Ledger Accounts:**
- **ESI Payable (Expenses Account)**
- **ESI Employer Contribution (Statutory Liability)**
2. **Pass Accounting Entries:**
- Debit **ESI Payable (Expenses Account)** (e.g., Salary Expenses) for the Employer Contribution amount.
- Credit **ESI Employer Contribution (Statutory Liability)** (e.g., Duties and Taxes) for the same amount.
**For Employee Contribution (0.75% of gross wages):**
1. **Create Ledger Accounts:**
- **ESI Payable (Expenses Account)**
- **ESI Employee Contribution (Employee Deduction)**
2. **Pass Accounting Entries:**
- Debit **ESI Payable (Expenses Account)** (e.g., Salary Expenses) for the Employee Contribution amount.
- Credit **ESI Employee Contribution (Employee Deduction)** (e.g., Employee Benefits Payable) for the same amount.
#### 2. Provident Fund (PF)
**For Employer Contribution:**
1. **Create Ledger Accounts:**
- **PF Payable (Expenses Account)**
- **PF Employer Contribution (Statutory Liability)**
2. **Pass Accounting Entries:**
- Debit **PF Payable (Expenses Account)** (e.g., Salary Expenses) for the Employer's Contribution amount.
- Credit **PF Employer Contribution (Statutory Liability)** (e.g., Duties and Taxes) for the same amount.
**For Employee Contribution:**
1. **Create Ledger Accounts:**
- **PF Payable (Expenses Account)**
- **PF Employee Contribution (Employee Deduction)**
2. **Pass Accounting Entries:**
- Debit **PF Payable (Expenses Account)** (e.g., Salary Expenses) for the Employee's Contribution amount.
- Credit **PF Employee Contribution (Employee Deduction)** (e.g., Employee Benefits Payable) for the same amount.
### Important Notes:
- Adjust the ledger account names as per your Tally ERP configuration and naming conventions.
- Ensure you classify and allocate the contributions correctly between liabilities (payables) and expenses (statutory liabilities) for accurate financial reporting.
- It's advisable to consult with your accountant or financial advisor to tailor the entries based on specific statutory requirements and company policies.
By following these guidelines, you can accurately record ESI and PF contributions in Tally ERP, ensuring compliance and proper financial management.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- About TDS & Income Tax
- Pass word to open justification report for Q1 for FY 2026-27
- Section 194JA & JB Income which ITR Form to use
- Scrutiny and reopening of past returns
- PPF interest-As Exempt Income disclosure
- Booth for sales promotion
- Type of Capital Gain
- F & O PROFIT REPORTING FOR AY 2026-27
- Average Cost Of High Quality Diamonds
- ITR 4 OR ITR 3 WHICH FORM CHOOSE
- TDS on Rent received on redevelopment of building
- Tax on Deemed Capital Gain
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Taxation in the hands of Landowner under JDA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
