How to achieve 6.5% deduction of ESIC contribution from both Employee & Employer

I want to learn about ESIC Deduction happens at the time of Salary Slip. How actually it works with ERPNext or How made it successful at your organization. As far as I know, its common contributions made by Employee & Employer both.

How it is done likewise, Total ESIC applied for a salary is 6.5 of Base Salary. From this, 4.75% is contributed by Employer while rest 1.75% is contributed by Employee to the govt. So, this contribution can be achieved by which way?

If I just made a deduction entry of 1.75% for any Salary Structure and apply the formula for an Employee. It will just deduct only 1.75%, while another 4.75% is still in Employer Account. In another way, If I made 2 ESI entries, one of them is 4.75% & another one is 1.75%. It will show, both to Employee Salary Slip only, while If I am correct, Employee contribution to ESI is only 1.75%. So, demonstrating both entries in deduction might be not a good way.

If just only one deduction made of total ESIC - 6.5% of Base, formula for this can be: base * .0325

What’s the correct way to achieve it? Any screenshot for Inspiration will be appreciated, and it will also help to understand fast to fellows as well.

[Edit: At Salary Slip, it’s only mentioned 1.75%, but 4.75% is a hidden entry, it should be in ledgers of Salary Account. Also, Is 4.74% is trackable with respective to Employee or should be not? I have confusion with 4.75% Employer Contributions. How to manage it, without showing it. How you manage it?]

Hello folks,

Any help on this query?

I’m not quite sure this is the standard way but IMO, treating employer contribution of 4.75% as an earning and then deducting 6.5% as ESI deduction should work. You may also want to select a payable account as default for the deduction type.

hope this helps