CA girl (Article Trainee-CA Final) (1942 Points)
14 September 2013What would be the accounting entries normally passed if salary is not directly credited and debited to the respective employee's a/c that is bulk salary due and payment entries for all employees?
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 14 September 2013
Couldn't get what you want to ask specifically.... but generally entry would be:-
Salary a/c dr.....
To Salary payable a/c.......
and on payment
Salary payable a/c dr....
To Cash/Bank A/c........
If query is something else, then kindly elaborate your query in detail...
CA girl
(Article Trainee-CA Final)
(1942 Points)
Replied 14 September 2013
Thankyou sir, That is what I wanted to know and what would be the accounting heads in tally for the both the Salary a/c and salary payable a/c?
One Of A Kind
(CA Final & CS Professional Student)
(187 Points)
Replied 14 September 2013
Acc. to me at the time when salary becomes due the entry would be
Salary A/c Dr
To Salary Payable A/c
and at the time of paying salary
Salary Payable A/c Dr
To Bank A/c
CA Pallav Singhania
(IT System Auditor)
(33262 Points)
Replied 14 September 2013
At the time of Credit of Salary:
Basic Salary A/cDr.
Allowance A/c Dr.
Spl All Dr.
To PF A/c
To ESIC A/c
To Professional Tax A/c
To TDS A/c
To Salary Payable A/c/Outstanding Salary A/c
At the time of Payment:
Salary Payable A/c/Outstanding Salary A/c Dr
To Cash/ Bank
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 14 September 2013
Dear Divya,
accounting head for salary would be "expense" and salary payable would be "current liabilities"..
CA girl
(Article Trainee-CA Final)
(1942 Points)
Replied 14 September 2013
Thankyou all, I observed at my clients place the accounting head for Salary Payable was Provisions...which was the reason for confusion. Thankyou :)
Ankit Agarwal
(New Delhi)
(70 Points)
Replied 01 October 2019
Kumar Sushank
(General Manager - Finance)
(1040 Points)
Replied 01 October 2019
@ Ankit : Normally salary should be booked on last date of the month, It will be easier to make P/L & it gives clear picture about expenses of that month.
Ankit Agarwal
(New Delhi)
(70 Points)
Replied 07 October 2019
thanks sir. thanks for clearing my doubts
Manzil Arora
(Others)
(1012 Points)
Replied 20 August 2020
Hi
Salary is the basic expense in every company and thus must be precise and also have better presentation for better understanding. I hope following entry might help you in recording compensation.
1. For recording accrual of compensation the following entry can be passed in the P&L Statement:
By Salary Expenses a/c* Dr.
By HRA Expenses a/c Dr.
By Spl. Allowances a/c Dr.
To Employee contribution EPF Payable a/c Cr.
To Employee contribution ESI Payable a/c Cr.
To Professional Tax Payable a/c Cr.
To TDS Payable a/c Cr.
To Salary Payable** a/c Cr.
(Being Salary expenses recorded)
*Salary expense a/c will be recording the Basic/Gross salary to be paid to employee exclusive/inclusive of all allowances given to him respectively.
** Salary payavle a/c will record the net amount of salary whiich shall be paid to the employee(s).
2. Record accrual of Employer's contribution in EPS / EPF / ESIC:
By Company Contribution to EPF expense a/c Dr.
By Administration Charges to EPF expense a/c Dr.
To Company's contribution EPF Payable a/c Cr
(Being EPF/EPS/ESIC expenses recorded)
3. Payment of Salary, EPS, EPF, ESIC:
By Salary Payable a/c Dr.
By TDS Payable a/c Dr.
By Employee contribution EPF Payable a/c Dr.
By Employee contribution ESI Payable a/c Dr.
By Professional Tax Payable a/c Dr.
By Company's contribution EPF Payable a/c Dr
To Bank a/c Cr.***
(Being compensation liability paid)
***You can credit employee payable account instead of Bank account if you want to bifurcate amount debited to each employee.
CAclubindia
