How to Create ESI Contribution Pay Heads in Tally Prime?

Step: GOT > Create > Pay Heads > Enter

Ø After reaching by follow above step, fill all details to create PF Contribution Pay Heads like,

· Name–Enter the name of statutory Contribution Pay Heads. like I Enter “Employer’s ESI Contribution @3.25%”

· Pay head type – In this section different type of Pay heads are listed. Select “Employees’ Statutory Contributions” from list to create Statutory Contribution Pay heads.

· Statutory pay type – In this section different type of Employee Statutory Contribution are listed. Select “Employee State Insurance” from list to create Employer‘s ESI Contribution Pay heads.

· Under – Select “Indirect Expense” because ESI Contribution is Indirect Expense for

Employer.

· Affect Net Salary – Set to this option “No” because ESI Contribution does not Affect net Salary.

· Name to be displayed in payslip – Type name “Employer’s ESI Contribution @3.25%“

to print in Pay slip

· Calculation Type – Select “As Computed Value” for Calculate ESI on Formula basis.

· Calculation Period –Automatic set “Months”.

· Rounding Method – Select any rounding method to round off Decimal portion of ESI

amount. Like I select “Normal Rounding”.

· Limit – Type Limit amount of rounding to round off according to limit. Like I type “1”.

· Compute – Select “On Specified Formula” Because we Calculate ESI Percentage basis on (Basic Salary + DA + Conveyance + HRA + Overtime).

Ø
After Selecting “On Specified formula” a new screen appear like that screenshot:

§ Add Pay Head – Select All Earning pay heads to calculate ESI value on basis of percentage of (Basic salary + DA + Conveyance + HRA + Overtime).

Ø Add Pay heads like that following screenshot:

Note 2:- ESI will be calculated on (Basic Salary + DA + Conveyance + HRA + Overtime)

· Effective from – Type Date from which you apply ESI rate for employer in Tally prime.

Like I type “1/Jan/2021”.

· Slab Type – Select “Percentage” to Calculate ESI value

Ø Value – Type Value of Percentage to calculate NPS amount. Such as type “3.25%”.

Ø Fill all Above details in Pay heads screen to create ESI Contribution Pay heads like following screenshot:

Ø Press Enter or Ctrl+A to save this screen.

EPS Contribution Pay Heads