PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Sr.manager - Hr&admin
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If Employer PF contribution is already shown in the CTC then it should not reflect in the deduction column. In that employee will be suffer. Employer PF contribution should be out of Gross salary. PF contribution money incurred by employer towards employee is shown in CTC and directly remitted to PF office. in normal course Employer PF contribution should be paid separately without showing in CTC but very long back onwards it has become common to Employer PF contribution in CTC
From India, Madras
PKAssociatesThank you Lakshmi Narayan Sir.
But I am unable to understand how will we pass the journal entry if the Employer contribution is taken as part of earnings and not deducted??
Here is the journal entry as per your response. In this case I will have an Employer Cont on the Debit Side but it will get paid to the Employee by way of Bank.
By Basic Dr. 5,00,000
By HR Dr. 2,50,000
By Spl Allowance Dr. (B/F) 2,26,600
By Employer Cont. (EPF)Dr. 23,400
To Employee Cont. EPF Cr - 21,600
To Professional Taxes - Cr- 2,400
To Salary Payable - Cr - 9,76,000
From India, Guwahati
sitaramsnIt seems vendor is correct. Employer contribution of EPF,ESI etc., will be shown in CTC for an understanding of the cost of employee. If we deduct the same from salaries it will affect the earnings of employee. It is to be contributed by employer.
From India, Hyderabad