How to Create PF deduction Pay Heads in Tally Prime?

Step: GOT > Create > Pay Heads > Enter

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

· Name–Enter the name of statutory deduction Pay Heads. like I Enter “Employee’s PF Deduction @12%”

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

· Statutory pay type – In this section different type of Employee Statutory Deduction are

listed. Select “PF Account (A/c No. 1)” from list to create Employee‘s PF Pay heads.

· Under – Select “Current Liabilities” because PF deduction is Current Liabilities for Employer.

· Affect Net Salary – Set to this option “Yes” because PF deduction Affect net Salary.

· Name to be displayed in payslip – Type name “Employee’s PF Deduction @12%” to

print in Pay slip

· Calculation Type – Automatic set “As Computed Value”.

· Calculation Period –Automatic set “Months”.

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

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 PF 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 PF 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 PF rate for employee in Tally prime.

Like I type “1/Jan/2021”.

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

· Value – Type Value of Percentage to calculate PF amount. Like I type “12%” if Salary up to 15000 and type Flat 1800 if Salary above 15000.

Ø Fill all Above details in Pay heads screen to create PF Deduction Pay heads like following screenshot:

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

a. NPS Statutory Deduction Pay Heads