Today, I will little elaborate the payroll accounting system by explaining about the employer's contribution in different funds of employees. According to different laws, it is the duty of employer to contribute some money in the different funds of employee. That is the reason, we say these contribution as Employer’s Statutory Contribution. All these contributions are not indirect expenses but also the current liabilities of employer. Now, I explain these contributions one by one.
1st : Employer's Contribution in Employee's Pension Scheme (EPS)
It is duty of employer to contribute in EPS. This will be the 8.33% of Basic Pay. This is indirect expenses and it is shown in the profit and loss account.
2nd : Employer's Contribution in Employee's Provident Fund (EPF)
It is duty of employer to contribute in EPF. This will be the 3.67% of Basic Pay or on specific formula amount ( Employee's deduction @12% - employer's deduction in EPS @ 8.33%). This is indirect expenses and it is shown in the profit and loss account.
3rd : Employer's Contribution in Employee's State Insurance (ESI)
It is duty of employer to contribute in EPF. This will be the 4.75% on ( Basic Pay + HRA + Overtime). This is indirect expenses and it is shown in the profit and loss account.
4th : Employer's Contribution in Employee's Deposit Linked Insurance Scheme (EDLIS)
It is duty of employer to contribute in EPF. This will be the 0.5% of Gross provident fund. This is current liability and it is shown in the liabilities side of balance sheet.
5th : EPF's Administration Charges
It is duty of employer to contribute in EPF. This will be the 1.10% of Gross provident fund. This is current liability and it is shown in the liabilities side of balance sheet.
6th : EDLIS's Administration Charges
It is duty of employer to contribute in EPF. This will be the 0.01% of Gross provident fund. This is current liability and it is shown in the liabilities side of balance sheet.
{Important Note GPF = Employer's Contribution in EPF + Employee's Contribution in EPF)
Related : Payroll Accounting System
1st : Employer's Contribution in Employee's Pension Scheme (EPS)
It is duty of employer to contribute in EPS. This will be the 8.33% of Basic Pay. This is indirect expenses and it is shown in the profit and loss account.
2nd : Employer's Contribution in Employee's Provident Fund (EPF)
It is duty of employer to contribute in EPF. This will be the 3.67% of Basic Pay or on specific formula amount ( Employee's deduction @12% - employer's deduction in EPS @ 8.33%). This is indirect expenses and it is shown in the profit and loss account.
3rd : Employer's Contribution in Employee's State Insurance (ESI)
It is duty of employer to contribute in EPF. This will be the 4.75% on ( Basic Pay + HRA + Overtime). This is indirect expenses and it is shown in the profit and loss account.
4th : Employer's Contribution in Employee's Deposit Linked Insurance Scheme (EDLIS)
It is duty of employer to contribute in EPF. This will be the 0.5% of Gross provident fund. This is current liability and it is shown in the liabilities side of balance sheet.
5th : EPF's Administration Charges
It is duty of employer to contribute in EPF. This will be the 1.10% of Gross provident fund. This is current liability and it is shown in the liabilities side of balance sheet.
6th : EDLIS's Administration Charges
It is duty of employer to contribute in EPF. This will be the 0.01% of Gross provident fund. This is current liability and it is shown in the liabilities side of balance sheet.
{Important Note GPF = Employer's Contribution in EPF + Employee's Contribution in EPF)
Related : Payroll Accounting System
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