Payroll - Employer Contributions

Hi All,

Was curious as to how Indian Payroll Users configure Employer’s contribution towards Employee Provident Fund. As we understand it, its neither an Earning of Employee(not part of Salary) nor a deduction(its not being deducted from Employee’s Salary). Its an additional Expense which a company books.

Some companies show it on Salary Slip separately. Some others issue a separate slip indication what amount was contributed by Employer. Note that Employee’s share of contribution towards the fund is actually a deduction and is mentioned on Salary Slip.

Can anyone share their implementation methods or workarounds used?



Talking as per v11.1.6

As rightly said

its neither an Earning of Employee(not part of Salary) nor a deduction(its not being deducted from Employee’s Salary). Its an additional Expense which a company books.

But company do prefer to show it in Salary Slip to inform the employees their indirect earnings.

According to me “Employer PF Contribution” Salary Component would be with flag “Do not include in total”.


The Salary Slip would look like below , assumption 12% is Employer Contribution and 11% is Employee Contribution of the basic salary.

All goes right, until the Journal Entry for Payroll Payable is created on click of “Submit Salary Slip” via Payroll Entry.

The expected JV Should look like below.

Chart of Accounts
PF Payable ( will be group account) & parent of Employer , Employee PF Payable Account
JV for Payroll Payable on Salary Slip Submit
Account Head Dr Cr
Salary (Expense) 20000
Employer PF Payable 2400
Employee PF Payable 2200
Payroll Payable 17800
Employer PF Contribution (Expense) 2400
Total 22400 22400
Actual Payment/Bank Entry for Salary
Account Head Dr Cr
Payroll Payable 17800
Bank 17800
Total 17800 17800
Actual Payment/Bank Entry for PF to Govt
Account Head Dr Cr
Employer PF Payable 2400
Employee PF Payable 2200
Bank 4600
Total 4600 4600

Whereas the actual Payroll Payable JV looks as below, here Employer PF Payable is treated as expense account as there is only provision to define expense account in salary component.

I think there should be provision as below in the Salary Component doctype for each components which are excluded from total to define

  1. if it is Payable > then Payable Account and Expense Account.
    At present for all components Expense is booked against the account defined in the account child table (first row) of the Salary Component Doctype . whereas for all components the final payroll payable set in Company Default Payroll Payable Account. is treated as payable account.

Looking out for experts view on this .


Same issue I’m having on the linked article below. We’ll need to create an Issue on Github and see how we can help get it done.

Has this issue of Employer Contributions been solved?

Employer Contribution implementation

Hey guys check my implementation above


Is there any solution to above mentioned issue?

I am also facing the same issue

Were you able to resolve this?

I liked this approach. I made one change -
Customise Form → Salary Slip

a. Added Column break after Deductions and added the Contribution Table
b. Added Column break after Total Deductions and added the Total Contribution

No I need to figure out where to make the changes to change the printing format and get the total contribution printed.

Will dig into accounting entries after this.

Progress so far.

a. Total not coming for Employer contribution.
b. Contributions ‘Formula’ column is showing in the table.

I am still studying the HR subject but employer contribution it’s a do not include in toal component.


Hi @jignesh_shah:

I’m sorry to write about an old post, but you have described exactly what I’m trying to solve.

So far my solution (without any custom modification, or additional scripts over a vanilla installation) is to create additional Salary Components (each with the Payable account and a negative value amount) for every original Salary component that represents Employer Contributions. I have tested it, and it works. However it feels quite not elegant (as the amount in the Ledger is negative for the payable account) and I think your propose was the reasonable way to go.

Did you manage to implement it? Or did you come with another solution?

I appreciate any lights on this. Thank you!

Define two components
Employer PFE as earning against expense account
Employer PFD as deduction against EPF Payable account.
This solves.


Hi Jignesh,
Would like your help in this matter.
I have a similar issue
Have created components for PEE and PFD as discussed above the only problem is my Bank entry doesn’t show this payable amount. It only contains payroll payable and bank amount debit and credit.
Could you tell what is exactly missing in this case?