Creating Employer’s ESI Contribution Pay Head

To create Employer’s ESI Contribution Pay Head,

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

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

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

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

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

5. By default, Affect Net Salary is set to No. Type Yes, if you want this component to be included in the Pay Slip

6. The Calculation Type field is pre-filled with As Computed Value and Calculation Period is pre-filled with Months by default

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

8. In the Compute field, select On Specified Formula from the Computation On list

9. In the Compute sub-screen, In Pay Head column select Basic Pay from the List of Pay Heads and select Add Pay Head to add other Pay Heads that will be considered for ESI calculation one by one and select End of List to return to Pay Head Creation

10. In the Effective Date field, enter the desired date from which the ESI Deduction will come into effect

11. Enter the Percentage in the Value Basis field

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

12. Press Enter to accept.

Note: ESI Contribution Pay Head should be added in the Salary Details after Basic, HRA, Conveyance and Overtime and Employee Deductions Pay Heads.