How to Create NPS Contribution Pay Heads in Tally Prime?

Step: GOT > Create > Pay Heads > Enter

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

· Name–Enter the name of statutory Contribution Pay Heads. like I Enter “Employer’s NPS Contribution @10%”

· Pay head type – In this section different type of Pay heads are listed. Select “Employer’s 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 “National Pension Scheme (Tier – I)” from list to create Employer‘s NPS contribution Pay heads.

· Under – Select “Indirect Expenses” because NPS contribution is Indirect Expenses for Employer.

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

net Salary.

· Name to be displayed in payslip – Type name “Employer’s NPS @ 10%” to print in Pay

slip

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

· Calculation Period –Automatic set “Months”.

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

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 NPS Percentage basis

on (Basic Salary + DA).

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

§ Add Pay Head – Select Basic Salary and then Dearness Allowance to calculate NPS value on basis of percentage of (Basic salary + Dearness Allowance).

Ø
Add Pay heads like that following screenshot:

Note 1:- EPF, NPS & EPS will be calculated on (Basic Salary +DA)

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

Like I type “1/Jan/2021”.

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

Ø Value – Type Value of Percentage to calculate NPS amount. Such as type “10%”.

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

Tally Prime Payroll Full Accounting

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

ESI Contribution Pay Heads