What is the journal and payment entry of P.F and E.S.I
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Answer Posted / gangaraju t c
(1) For Journal Entries for Salary account
Dr. Salary account (Gross)
Cr. TDS on salary*
Cr. Professional Tax payable*
Cr. EPF-Employee contribution payable*
Cr. ESI-Employee payable contribution payable*
Cr. Salary Payable
Note*:
(a)TDS on salary - According to the IT Act If the annual
salary of the individual exeeds slab rate (Slab rate may be
vary from year to year asper union budget)after 80C, 80D,
80G, average rate deductuble.
(b)Profession Tax - the state governments collect the
tax .this tax on profession vary from state to state.
(c)EPF & ESI-Employee Contributions - EPF is 12% & ESI is
1.75% should be deduct from the Employee.
All are above comes under the sub-head payables under
liablities side. Because those all are above mentioned are
deducted by employer should submit to concerned departments
as acts & rules.
(d)salary payble - this is the net salary to be paid to
employees after deduction of (a), (b) & (c) also comes
under the sub-head payables under liablities.
Employer contribution to EPF & ESI are Comes under Indirect
Expenses.
Journal Entries for the payment of all above
Dr. TDS on salary
Dr. EPF employee contribution
Dr. ESI employee contribution
Dr. EPF employer contribution
Dr. ESI Employer Contribution
Dr. Profession tax
Dr. Salary
Cr. Cash / Bank
(All are combained entries you can show each seperately
according to your convinience)
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