Advance Salary Journal Entry

Advance is a prepaid expense 

Dr. Prepaid salary 

Cr. bank 

By the month end 

Dr. Salary expense 

Cr. Prepaid salary

1) Advance Salary payment entry 

2) Salary Booking entry 

3) Actual salary payment entry with adjustment .  

Dear Eiswar  company paid two times , one is advance and another is actual  Salary , thats why we have to do two payment  entries 

Advance Salary to Director A/c will be under Loans & Advances ( Asset ) Side Balance sheet .

Salary Journal Entries

For Example:

Vineet works is an employee of ABC electronics pvt. ltd. and his monthly salary is Rs 35,000. But he took some advance salary from Rs 10,000.

Now, lets check how to pass the entry.

Advance salary entry

Vineet Salary Advance a/c             Rs 10,000
      To Bank a/c                                                 Rs 10,000

Month end salary entry

Vineet Salary a/c                            Rs 35,000
      To Vineet Salary Advance a/c                     Rs 10,000
      To Vineet Salary Payable a/c                       Rs 25,000

Payment Entry

Vineet Salary Payable a/c               Rs 25,000
      To Bank a/c                                                 Rs 25,000

TDS is also applicable under 194J I guess

It is considered at the time of entering journal entries or at the time of making payment, which ever is earlier. 

2% is attracted based on treshold.