PF-entry

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madhav (Querist)

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.

Ram Avtar Singh

Ram Avtar Singh (Expert)

20 April 2010 salary a/c Dr
House rent allowance Dr
Conveyance allowance Dr
Medical allowance Dr

salary payable Cr
EPF-employee share Cr
ESI-employee share Cr

K V Subba Rao

K V Subba Rao (Expert)

20 April 2010 The following is a "safer" option

(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

CA.TAPAS DALAR

CA.TAPAS DALAR (Expert)

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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CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

20 April 2010 Employer contribution need to show separate account called Employer PF Contribution. so entry may be

Salary A/c Dr
Emp.PF contribution A/c. Dr
Salary payable Cr
PF payable Cr

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