Payroll accounting is recording of salary expenses into the general ledger. The expenses include gross salaries and liability accounts. The liabilities include income tax payable and payroll taxes payable accounts etc.
Salary Provision Entry
Salaries A/c Dr – 4,00,000
To ESI Employee Contribution A/c – 2,000
To PF Employee Contribution A/c – 16,000
To Professional Tax Payable A/c – 1,200
To TDS on Salaries A/c – 6,300
To Salaries Payable A/c – 3,74,500
Salary Payment Entry
Salaries Payable A/c Dr – 3,74,500
To HDFC Bank A/c – 3,74,500
ESI Payment Entry
ESI Employee Contribution A/c Dr – 2,000
ESI Employer Contribution A/c Dr – 4,500
To HDFC Bank A/c – 6,500
PF Payment Entry
PF Employee Contribution A/c Dr – 16,000
PF Employer Contribution A/c Dr – 18,000
To HDFC Bank A/c – 34,000
Professional Tax Payment Entry
Professional Tax Payable A/c Dr – 1,200
To HDFC Bank A/c – 1,200
TDS on Salary Payment Entry
TDS on Salaries A/c Dr – 6,300
To HDFC Bank A/c – 6,300
Salary Advance Adjustment Entry
Salary advance given to Balu of Rs.12,000. The same will be deducted from his salary.
Salary Advance Entry
Salary Advance to Employees A/c Dr – 12,000 (Loan & Advances – Current Assets)
To HDFC Bank A/c – 12,000
When Salary is Processing
Salary A/c Dr – 50,000
To Salary Advance to Employees A/c – 12,000
To PF Employee Contribution A/c – 1,800
To Professional Tax Payable A/c – 200
To TDS on Salaries A/c – 3,000
To HDFC Bank A/c – 33,000
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