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Accounting treatment for govt contribution to epf

Ashwini Rao (Article student) (47 Points)

22 July 2021

How to pass journal entry for government contribution to EPF @ 24% under new rule , in the books of employer and employee

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3 Replies

prasad Nilugal (3914 Points)
Replied 22 July 2021

EPF will be deducted from salary of the employee

Salary A/c Dr
To Salary payable A/c Cr
To E . provident Fund A/v Cr
( Being contribution towards EPF )

when EPF will be paid in Govt account
E provident fund A/c Dr
To Bank A/c Cr
( EPF deposited in GOVT account )

E provident fund account will be under current liabilities Balance sheet .

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Ashwini Rao (Article student) (47 Points)
Replied 22 July 2021

Sir, my question is not for treatment of employee contribution, but for contribution of government under new scheme in respect of new employees for 2 years

prasad Nilugal (3914 Points)
Replied 22 July 2021

Ok , under the new scheme GOVT to provide EPF subsidy for two years in respect of new employee in establishment with following conditions .
1) employee drawing monthly wages less than 15000/- and working in Establishment not registered under pf and did not have UAN number prior to 1/10/20 in Establishment employing up to 1000 employee GOVT will pay 24 % in respect of new employee for 2 years
2 ) Establishment having employee more than 1000 Govt will pay only new employee contribution 12 % up to year's .
you have to check out period of appointment from date ,up to what date is applicable.