Creating ESI Contribution Pay Head for Employers (Payroll)

In Tally.ERP 9, you can create a pay head to account for the employer’s contribution towards RSI.

To create Employer’s ESI Contribution pay head

1. Go to Gateway of Tally > Payroll Info. > Pay Heads > Create .

2. Enter the name of the Pay Head in the Name field.

3. Select Employer’s Statutory Contributions as the Pay Head Type , from the list of Pay Head Types .

4. Select Employee State Insurance in the Statutory Pay Type field .

5. Select Indirect Expenses from the List of Groups , in the Under field.

6. By default, Affect Net Salary is set to No . Type Yes , if you to include this component in the pay slip.

7. The Calculation Type is set to As Computed Value , and Calculation Period is set as Months , by default.

8. Select Normal Rounding from the list of Rounding Methods , and type 1 as the rounding Limit .

9. In the Compute field, select On Specified Formula , from the Computation On list . The Compute sub-screen appears.

● Select Add Pay Head from the List of Pay Heads to add pay head to be considered for ESI calculation.

● Select End of List to return to Pay Head Creation .

10. In the Effective Date field, enter the date from when the ESI Deduction will be effective.

11. Enter the percentage in the Value Basis field.

Note: The amount is not specified in the Pay Head creation screen for ESI as the same will be taken from the Satutory Master file.

12. Press Enter to accept.

Note: ESI Contribution Pay Head should be added in salary details after Basic, HRA, Conveyance and Overtime, and Employee Deductions pay heads.