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How to account for HRMS-Payroll & respective TDS on Salary u/s 192 in Ginesys ERP?

Owned by Aparajita Basu Roy
Last updated: Jan 10, 2024

Table Of Content

Background

Ginesys ERP does not provide specific module for HR-Payroll handling. So in general, brands maintain their HR-Payroll operations outside the Ginesys ERP, but since the accounting and financial statements are prepared from the ERP, brands need to put in the accounting impact for salary and TDS entries to keep the books up-to-date.

What should be the approach for maintaining the HR-Payroll in the ERP?

In general, there are two approaches in which brand could choose to maintain their HR-Payroll in the ERP:

  1. Who want to disclose the employee level segregation in the ERP - Pass all the Payroll related entries in the individual employee name
    OR

  2. Who does not want to disclose the employee level segregation in the ERP - Pass the Payroll related entries in a common HRMS Liability account and maintain the individual segregation in HRMS-Payroll system.

Accounting Entries based on both the Approaches

 

Particulars

Approach 1 - Who want to disclose the employee level segregation in the ERP

Approach 2 - Who does not want to disclose the employee segregation in the ERP

Particulars

Approach 1 - Who want to disclose the employee level segregation in the ERP

Approach 2 - Who does not want to disclose the employee segregation in the ERP

1

Ledger/Subledger creation in the ERP

Create Employee wise Sub ledger in the ERP

Note: Assigning AR/AP ledger in employee is not a good option because it will increase the volume of transactions in the system and it is not relevant. It is suggested to map it as a sub ledger against the general ledger “Employee Liability“.

 

Create a single Sub ledger in the ERP as “HRMS Employee”

Note: Assigning AR/AP ledger in this SL as “HRMS Liability”. Since there is only one subledger so it is advisable to create is as an AR/AP so that document level tracking could be done.

2

Accounting Entries to passed in the ERP based on the payroll sheet received from the HR department

Basic Salary a/c Dr. 1000.00/-
DA a/c Dr. 100.00/-
HRA a/c Dr. 500.00/-
LTA a/c Dr. 200.00/-
To Deduction a/c 100.00/-
To Employee Liability - Employee 01 a/c 1000.00/-
To Employee Liability - Employee 02 a/c 700.00/-

Note: General Journal - Payroll components are booked on cumulative basis and Liability is booked Employee wise where employee name is a sub ledger.

Basic Salary a/c Dr. 1000.00/-
DA a/c Dr. 100.00/-
HRA a/c Dr. 500.00/-
LTA a/c Dr. 200.00/-
To Deduction a/c 100.00/-
To HRMS Liability a/c - HRMS Employee 1700.00/-

3

Now TDS entry need to be passed

Employee Liability - Employee 01 a/c 100.00/-
Employee Liability - Employee 02 a/c 70.00/-
To TDS Agency Liability a/c 170.00/-

Now TDS entry need to be passed

HRMS Liability a/c - HRMS Employee Dr. 170.00/-
To TDS Agency Liability a/c 170.00/-

 

4

While payment/disbursement of Salary to the Employees

Employee Liability - Employee 01 a/c Dr. 900.00/-
Employee Liability - Employee 02 a/c Dr. 630.00/-
To Bank a/c 1530.00/-

While payment/disbursement of Salary to the Employees

HRMS Liability a/c - HRMS Employee Dr. 1530.00/-
To Bank a/c 1530.00/-

5

While payment of TDS u/s 192 on due date

TDS Agency Liability a/c Dr. 170.00/-
To Bank a/c 170.00/-

While payment of TDS u/s 192 on due date

TDS Agency Liability a/c Dr. 170.00/-
To Bank a/c 170.00/-

How to file TDS return u/s 192 from ERP?

In TDS return mainly two type of information are required:

  1. Challan details for Payment of TDS every month on due date

  2. Employee wise details month wise reconciling with the challan

Return format:

Approach 01 - Who want to disclose the employee level segregation in the ERP

  • Challan details - AP voucher

  • Employee wise TDS details - Credit journal

    • It is advisable to prepare a report in the format of TDS return so that task becomes flawless. Columns and their fetching logic is given below:

      • PAN Number - Employee Sub ledger master

      • Name - Employee Sub ledger master

      • Date of credit/payment - Credit Journal Entry date

      • Taxable amount on which TDS is deducted - Narration from credit journal

      • TDS amount - Amount from credit journal

      • Total Deposited - Amount from credit journal

Approach 02 - Who does not want to disclose the employee segregation in the ERP

  • Challan details - AP voucher

  • Employee wise TDS details - Not in ERP, take from HRMS system