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How do I enter EPF - Employer's contributuion as well as employee contribution in PMS and Accounts?

edited February 2014 in Accounting
Q:
Deductions of PF/FPF from salary and deposits by Employer with PF authorities of both components of Employer/ employee contributions – How should it be accounted in the
1. PMS
2. Accounting module.

A:
EPF entries can be handled as per the example shown below:

Suppose the gross salary is 10,500 (10,000 salary and 500 is the employer contribution to salary)
Let us assume:
EPF employer contribution is 500
EPF deducted from salary 600
Net Salary paid to the employee 9400

Enter transaction as:

In PMS,
Under PPF, create one asset as EPF A/c
Enter two investment entries of Rs. 500 and 600 each for every month, one for Employer contribution and one for Employee contribution in this EPF A/c

In Accounts:

Create one ledger:
Employer name (under ‘Sundry Debtors’)

Pass JV as

Dr Empolyer name - 10500
Cr Salary Income 10,500

Now, right click the EPF A/c ledger and assign it to your Employer Name.

So, the net receivable from Employer will be 9400. When you receive the payment in your bank, show one receipt entry from your employer. This will complete all the transactions.

You can enter other details like TDS or Profession tax in JV if it is applicable in your case.

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