ENTRIES OF ESIC

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 November 2010 Dear Sir,
Pls suggest me what should be the entries if we are deducting ESIC contribution from workers wages like 1.75%, Contribution of employer 4.75% & paying to ESIC total of both.
What should be the entries in ESIC a/c & in wages a/c.

pls suggest .

thanks.

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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27 November 2010 Assume you are paying 1000 gross salary, 175 ESIC deduction and balance paid to employee is 825. Entry is:

Debit Salary Exps 1000, Credit ESIC Liability 175, Credit Cash 825 (825 is paid to employee)

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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27 November 2010 When you pay the liability of 175. The entry is

Debit ESIC Liability 175, Credit Cash 175. Liability account becomes zero

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Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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27 November 2010 For the employer's contribution. Pls note that this is an expense which is not recovered from the employee.
Assume the contribution is 200. The entry is:

Debit Employer's Contribution Exps 200 Credit Employer's Contribution Liability 200

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Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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27 November 2010 When you pay the liability of 200. The entry is

Debit Employer's Contribution Liability 200, Credit Cash 200. Liability account becomes zero

Message likes : 1 times