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Implementation of Payroll Accounting in tally ERP 9

Implementation of Payroll Accounting in tally ERP 9

Tally.ERP9 delivers integrated payroll software with all the necessary payroll compliances built in.

The Payroll feature handles simple Pay slip generation right up to complex allied processes including

Loans and advance, salary revision and arrears calculation, Deduction and ad-hoc payments etc.

Tally ERP 9 Payroll also covers a wide range of functions including:

  • Create and maintain the employee database viz. contact/personal/bank accounts/statutory details etc., expat detail like passport, visa and work permit
  • Employee group or department wise categorization
  • Attendance, overtime, leave or production detail
  • Multiple salary structure for different group of employees for example, department-wise salary structures and processing
  • Support salary revision and arrears calculation both as prospective and retrospective change
  • Tracking of loans and advance paid to employee and defining multiple criteria for recovery of such advances (single or multiple installments from the employee’s salary)
  • Complete support to implement provident fund and employee Insurance Schemes along with professional tax calculation
  • Support gratuity as per the specific criteria

Benefits of using Tally ERP 9 Payroll

  • Time spent on processing salary and paper work can be reduce to a great extant
  • Accurate and timely salary processing
  • Salary calculation against employee is much easier
  • Generate the payment advice to instruct the bank salary payments
  • Pay slips can be printed, exported to excel or emailed to the respective employees
  • All payroll-related reports can be generated with the click of a button
  • Above all, the payroll feature is completely integrated with Accounts

The new Payroll feature provides the following Statutory Reports:

  • Employees provident fund computation & Support
  • PF deduction & contribution monthly statements
  • PF combined challah
  • Form 5
  • Form10
  • Form 12A
  • Form 3A
  • Form 6A etc.
  • ESI computation & Support:
  • ESI deduction & contribution monthly statement
  • Payment challan
  • Form 3
  • Form 5
  • Form 6 etc.
  • Professional Tax computation for all the states with the following reports
  • PT computation reports
  • PT monthly report…

The new enhanced Payroll in Tally ERP 9 requires minimal 0 for the accurate salary processing. It takes only five easy steps to process payroll and generate pay Slip in Tally ERP 9.

  • Pacific computers Pvt. Ltd in an institute for computer Education in dehrasun and included the departments as follows
  • Faculty/Trainers 2) Administration           3) councilor      4) Accounts       5) Marketing

Create a Company for the Company Setup

Go to Gateway of Tally >Company Info >Create company

In company creation screen

Set the option are as mention below:

Select india in the statutory compliance for form the list of countries provided

Financial Year 1-4-19 and book beginning form 1-4-19

payroll set up company in tally

Press enter to accept the company creation screen

Activation of payroll

Go to  gateway of tally> press f11 company features > press f1 accounting features set maintain payroll to yes

Set more than one payroll /cost category to yes.

payroll set up tally erp 9

Press enter to accept the screen .

After activating payroll  from  f11 statutory and taxation features.

Set enable payroll statutory to YES

Press Enter to accept the screen.

In payroll statutory details screen.

Provident Fund

Company code : Enter provident fund code No of the company issued by the department. Company account group code .Enter the security code of the company issued by the department.

Company security code : Enter the security code of the company issued  by department.

Employee state insurance :

  • Company code :Enter the ESI code of the company issued by the department.
  • ESI branch office : Enter the nearest ESI office under whose authority the company is located
  • Standard working days (per month) Enter the constant pay period to be considered for ESI calculation if this field is left blank the calculation is done based on the calendar days in each month .

Income Tax

  • Tax deduction and collection account number: Specify the 10 digit TAN assigned to the employer .
  • Income tax circle/ ward: specify the name of the income tax circle to which the employer is associated.
  • Deductor Type : Select government for a company belonging to central or statement government for all other select others.
  • Name of person responsible : Enter the name of the person responsible for TDS deduction in the company.
  • Son/daughter of :enter father’s for the person responsible for TDS deduction in the company
  • Designation : Specific the official designation of the person responsible for TDS deduction Enter all details as mentioned in the screen.

payroll statutory details

Press Y or enter to accept the screen

statutory details in tally erp 9 payroll

The payroll info menu allows  to create various payroll related masters required for calculating earning and deductions for employees.

Go to gateway of tally >Payroll info

payroll info in tally

Create payroll masters

Employee Group masters

Business with multiple departments divisions function or activities  may create the required employee group and classify individuals employees under a specific group ie production sales, marketing ,stores support or particular group of employees such as Manager ,supervisors ,Sub staff and so on.

To create sales employee group:

Go to gateway of Tally > Payroll Info > employee groups > Create

In employee group creation screen.

  • Category : Primary cost category
  • Name : Faculty
  • Under : Primary
  • The completed employee creation screen appears as shown below

employee creation in payroll tally

Press Y or enter to accept the employee group creation screen.

Similar create administration ,Councillors marketing , and accounts as above

Employee masters

To enter statutory and contract details of the employee you can create employee master

To enable the options for the above information activate the options from F12 configuration as follows.

Go to gateway of Tally > F12 configuration > Payroll configuration

Set the options as shown in the payroll configuration screen

payroll in tally configuration

Go to gateway of tally > F12 configuration  > payroll configuration > Printing > payroll

printing payroll configuration tally

Press Enter to accept the screen

Create employee master

Create the following employee masters

S.r Employee name Department Date of Joining
1 Mahesh Kumar Faculty 1-5-19
2 Ramesh Sinha Faculty 1-5-19
3 Kapil kumar Adminsitrator 1-5-19
4 Mona shah Concilor 1-5-19
5 Nilesh Gupta Accounts 1-5-19
6 Monika Marketing 1-5-19

 

 

To create employee master

Go to gateway of tally >payroll info >employee > create

Create the employee as mentioned in screen

Press Y or enter Accept the screen

employee payroll tally

Similarly create the employee master for other employees with their department respectively and enter the all required details in the field.

Payroll Unit

As per the company requirement Unit of measurements are created for calculation of pay head .units can be created info two types

  • Simple payroll units
  • Compound payroll units

 

Simple units includes day, week ,month hours ,,pcs ,box  nos etc. and compound payroll units includes the units which are combination of two simple units like hours of 60 minuts. Month of 26 day of 8 hours.

Tally ERP 9 provides default calculation period as days ,fortnights ,months, weeks, for payroll unit as per business requirements.

Create the following units as mentioned below

  • Hours
  • Minutes
  • Hrs of 60 Mins

To create simple payroll units

Go to gateway of tally > payroll info> Units (working period )create in units creation screen.

  • Type : Simple
  • Symbol: Hrs
  • Formal name : Hours
  • Number of Decimal places 2

The complete units creation screen appears as shown below

unit payroll tally

Press enter to accept the unit creation screen

Create minutes as simple unit.

  • Type : Simple
  • Symbol : Mins
  • Formal Name : Minutes
  • Number of Decimal Places : 0

Create compound payroll Units

Press Backspace and select compound as the type of unit

  • Type ; Compound
  • First unit : Hrs
  • Of: 6
  • Second unit : mins

The completed compound units screen appears as shown below

compound payroll

Attendance /Production Type s

Attendance /Production types masters are used to record the nature of attendance /Production ie: Time and work rate .In tally ERP9 you can create attendance types based on time such as Present and Absent or based on Work based production units such as piece production ,Sales performance and so on.

Create the following attendance Type for prompt computer PVT ltd

Name Under Attendance /Production Period Type
Present Primary Attendance /leave with pay Days
Absent Primary Leave without pay Days
Overtime Primary Production Hrs of 60 Mins
Calendar Month Primary User defined Calendar Type Days

 

To create present attendance type

Go to gateway of tally > payroll info . Attendance /production types > create

  • Name : Present
  • Under primary
  • Attendance Type : Attendance /leave pay
  • Period Type : days (automatically selected)

The completed attendance /production creation screen appears as shown below

attendance payroll tally

Press Y or enter the screen.

Similarly create remaining attendance and production as mentioned in table.

Pay heads

Pay head are treated as expense /Liability with the employers point of view and with employee point of view it is considered as income /earning and deductions.

Pay head includes basic ay ,Travelling allowance dearness allowance house rent allowance Uniform allowance etc. And the deduction includes employees provident fund (EPF) .Employee state insurance ESI professional Tax, Income Tax,TDS advance etc.

Create the pay head basic pay house rent allowance conveyance overtime pay.

Variable pay.

To create the earning  pay heads.

Go to Gateway of tally > Payroll info > Pay Heads > Create

Basic Pay

  • Pay head type : earning for employees
  • Income Type : Fixed
  • Under : Indirect expense
  • Affect net salary : Yes
  • Name appears in payslip : Basic pay
  • Use for gratuity : yes
  • Set /Alter Income Tax details : Yes

The completed income tax details screen appears as shown below

  • Calculation Type : On attendance
  • Attendance /Leave with pay : Present
  • Calculation period : month
  • Per day calculation basis : User defined month of 26 days.
  • Rounding method : Normal Rounding
  • Limit :1
  • Opening balance : Skip blank

Press Y or Enter to accept the screen

House rent allowance .

  • Pay head type : earning for employees .
  • Income typw : Fixed
  • Under : Indirect Expense
  • Affect Net salary : YES
  • Name appear in pay slip : House Rent Allowance
  • Use for gratuity : No
  • Set /Alter income tax details : Yes
  • Calculation type : As computed value
  • Calculation period : Months
  • Rounding Method : Normal rounding
  • Limit :1

In computation info :

12 ) Compute on specified formula

After selection of on Specific formula

 

The screen appears as shown below.

Select basic pay in the field of pay head

  • Effective form 1/5/19
  • From amount skip blank
  • Amount upto : skip blank
  • Slap Type : Percentage
  • Value basis : 20%
  • Opening balance : Skip Blank

The complete pay head creation screen appears as shown below.

Press Y or Enter to Accept the screen.

Conveyance :

  • Pay head type : earning for employees
  • Income type : fixed
  • Under : Indirect expense
  • Affect net salary : yes
  • Name appear in payslip : Conveyance
  • Use for gratuity : No
  • Set/alter income tax details: Yes
  • Calculation type : flat rate
  • Calculation period : Months
  • Rounding method : normal rounding
  • Limit :1
  • Opening balance : skip Blank

The completed pay head creation screen appears as shown below

Press Y or enter to Accept the screen.

Overhead Pay

  • Pay head Type :earning for employees
  • Income Type : Variable
  • Under :Indirect expense
  • Affect net salary : Yes
  • Name appear in pay slip : Overtime pay
  • Use for gratuity : No
  • Set /Alter income tax details :Yes
  • Calculation type : on production
  • Production Type : Overtime
  • Rounding method : Normal Rounding
  • Limit :1
  • Opening Balance : Skip blank
  • The complete pay head creation screen appears as shown below.

Press Y or enter to accept the screen.

 

Variable pay

  • Pay head type : earning for employees
  • Income type : fixed
  • Under : Indirect expense
  • Affect Net salary : Yes
  • Name appears in payslip .Variable pay
  • Use for gratuity : nO
  • Set alter income tax details : Yes
  • Calculation type : as per user defined value
  • Opening balance : Skip blank

The completed pay head creation screen appears as shown below

Press Y or enter Accept the screen.

Deduction pay heads

Create the deduction pay heads as mentioned below

Employees PF deduction @ 12%

  • Pay head type : employees statutory deductions
  • Statutory Pay type : PF account (A/c 1)
  • Under : Current Liabilities
  • Affect Net salary : Yes
  • Name appear in pay slip : employees PF deduction @12%.
  • Calculation type : As computed value (automatically comes)
  • Calculation Period : Months automatically comes
  • Rounding Method : Normal rounding
  • Limit :1

In computation Info:

  • Compute on specific formula after selection of on specific formula.Select basic pay in the field of pay head press Enter to accept the screen.
  • Effective form : 1/5/19
  • From amount : skip blank
  • From amount : skip blank
  • Slab type : percentage
  • Value basis : 12%
  • Opening Balance : skip Blank.

 

The completed pay head creation screen appears as shown below.

Employees ESI deduction @1.75%.

  • Pay head type : Employees statutory deductions.
  • Statutory Pay Type : employees state Insurance.
  • Under : Current Liabilities.
  • Affect Net salary : Yes.
  • Name appear in payslip : ESI deduction @1.75.
  • Calculation period : Month (automatically comes)
  • Rounding Method : Normal Rounding.
  • Limit :1

In computation info.

  • Compute : On specified formula.
  • After selection of option on specified formula screen appears. Select Basic pay in the field of pay head of the screen.
  • Select add pay head in function column.
  • Similarly select conveyance and overtime pay as add pay function
  • The completed screen appears as shown below.

Press enter to accept the screen.

  • Effective form 1-5-19
  • Form amount : Skip blank
  • Amount unto : Skip blank
  • Slab rate: Percentage
  • Value basis :m 1.75%
  • Opening Balance : Skip blank.

The complete pay head creation screen appears as shown below

Press Y or Enter to accept the screen

Professional Tax

  • Pay head type : employees statutory deductions
  • Statutory pay Type : professional tax
  • Registration number : MH/PN/206578
  • Under : Current Liabilities
  • Affect net salary :Yes,.
  • Name appears in pay slip : Professional tax
  • Calculation type : As computed value automatically comes
  • Calculation period :month
  • Rounding method :normal Rounding
  • Limit ;1

In computation info

  • Compute : on current earning total
  • Enter the details in the table from the completed screen
  • The completed pay head creation screen appears as shown
  • Press y or enter to accept the screen

Income tax

  • Pay head type : employee statutory deductions
  • Statutory pay type : income tax
  • Under : Current Liabilities
  • Affect net salary : yes
  • Name appears in payslip : Income tax
  • Calculation type :As per income tax slab automatically comes
  • Calculation period :Month
  • Rounding Method :upward rounding
  • Limit :1

The complete pay head creation screen appears as shown

Gratuity:

Gratuity  the concept in which the employer gives a financial benefit to the employee at the time of the retirement .The gratuity is calculated at the end of each financial year as provision liability with the gratuity provisional account.

To create gratuity pay head

  • Name : Gratuity
  • Pay Head Type :graduity
  • Press enter to view the slab rate for gratuity calculation screen.
  • Enter the details form the following screen
  • Press enter to accept the screen
  • Under : Provision
  • Set/alter income tax detail : Yes
  • Rounding method : Normal rounding
  • Limit :1
Pay head Mahesh Kumar Ramesh Sinha Kapil kumar Mona shah Nilesh Gupta Monika
Basic pay 12000 10500 10500 22500 15000 15000
House rent

allowance

20% 20% 20% 20% 20% 20%
Conveyance 500 2000 6000
Overtime pay 90 60 55 400 600 300
Variable pay User defined
Professional tax As per slab rate
Esi @1.75% As per slap rate
Income tax As per slab rate
Gratuity As per income tax

 

Salary details setup :

To set the salary details for employees

Go to gateway of tally >Payroll info > Salary details > define

Select Mona form the list of employee press enter to view the screen

Press enter to view the screen

Enter the details form the completed screen.

For the changes press F12 configuration set “allow to override slab percentage to Yes

The f12 configuration screen appears as shown below

Press enter to accept the screen

Press Y or enter to accept the screen

Payroll Vouchers

In tally erp 9 there are three types of vouchers for payroll and payment vouchers are used for the purpose of operating the payroll and also records the attendance of the employees for a given period .This vouchers are used to do the payroll processing.

Attendance Vouchers

To record employees attendance production types the employees present or absent days overtime hours and more the attendance vouchers are lised.

In tally you can enter the attendance records through a single attendance voucher for a payroll period.Tally allows you to record the attendance for each employee as per day for per month.

The auto fill facility AlT+A is used to prefill the required attendance types data for the selected employee group employee for the specified period.

1/5/19 Prompt computers pvt ltd employees attendance details for the month of may 2019 are as follows

 

 

 

S.r Employee name Present days Overtime Hours
1 Mahesh Kumar 20 300
2 Ramesh Sinha 24 200
3 Kapil kumar 24 400
4 Mona shah 24
5 Nilesh Gupta 19
6 Monika 24 400

 

To make the attendance voucher for present days

Go to gateway of tally > payroll voucher >press(CTRL+ F5) for attendance voucher

Date :31-5-2019

Press alt a to auto fill the attendance details > press enter to view the attendance auto fill screen

  • Voucher date : 31/5/19
  • Employee category : primary cost category
  • Employee /Group : Select all items for enter detaisl for all employees in a single voucher in auto fill values field.
  • Attendance /production type: Select present to make a present voucher
  • Default value to fill : accept default 0 ( to enter the present days for each employee) if you are making one common entry for all employees then select 0 otherwise enter the employee present days.
  • The complete attendance auto fill screen appears as shown below

Press enter to accept the screen

In Attendance voucher screen

Enter the employees present days as display in the screen.

Press Y or enter to accept the screen

To make an attendance voucher for overtime

  • Date : 31/5/2015
  • Press Alt+ A to auto fill the attendance details > press enter to view the attendance auto fill screen
  • The complete attendance auto fill screen appears as shown below
  • Press enter to accept the screen

In attendance voucher screen

 

Enter the employees overtime hrs as display in the screen

Press Y or enter to accept the screen

P

Payroll vouchers

All employee details are recorded in payroll voucher .It allows  you to compute all values for respective pay heads.

In tally erp 9 you can  press payroll voucher manually for individuals employee as well as for the entire group/organization by using the auto fill facility (alt +A).

31/5/2019 Pacific computers ltd calculate payroll for all employees for the month may 2019

 

Create ledger salary payable under current liabilities

To create ledger Go to gateway of  tally > payroll info> pay head > create

Enter the details as shown in the screen

The completed ledger creation screen appears as shown below

Press Y or enter to accept the screen.

  • To make a transaction in (ctrl+ F4) payroll voucher
  • Go to gateway of tally . payroll voucher > press Ctrl+F4 payroll voucher
  • Date : 31/5/19
  • Press alt+A for payroll auto fill screen
  • Enter the detail as shown in the following screen
  • Press enter to accept the screen
  • To view the entry you can drill down the screen with the help of enter key.
  • The complete payroll voucher screen appears as shown below.
  • Press Y or enter to accept the screen.
  • Press page up to view the complete voucher or go to gateway of tally> display >daybook

Salary payment voucher

To make payment transaction for salary payment to employee is regular payment voucher is used or you can make and enty with auto fill facility provided by the tally erp 9.

31/5/19. Pacific computer paid salary due for the month of may 2019 by Cheque

Create ledger Bank under bank accounts and enter opening balance of Rs 200000.

Make an entry of transaction

  • Gateway of tally >Accounting voucher > press f5 for payment voucher
  • Press F12 configuration and set use single entry mode for Pymt/receipt /contra to Yes
  • Date 31/5/19
  • Alt + A for payroll auto fill screen.
  • Enter the details as shown in the following
  • Press enter to accept the screen the complete payment voucher screen as shown below.
  • Press Y or enter to accept the voucher.

 

Payroll report

Payroll report help to shoe all the payroll expense for the particular month transaction for a particular employee you can also view statutory forms needed for provident fund and employee state insurance (ESI).

Pay slip

A payslip is document which is issued to an employee with month payment in Which includes all details of the employees earning and deduction and net amount paid for given pay period .

 

To view payslip

Go to gateway of tally> display>payroll report>statement of payroll> payslip > single payslip> slect mona > press enter to views the payslip report screen

 

Updated: September 5, 2019 — 10:01 am

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