Provident Fund Calculation and Payroll in Manual System & in OpenERP

Provident Fund Register of an Employee (say Mohsin) of 6 Months is below;

Mohsin Provident Fund Register
		Provident Fund
Month	Basic Salary	By Employee 12%	By Company 1.3%	Net Salary Payable	Net Provident Fund Payable
July	15000	1800	195	13200	1995
Aug	15000	1800	195	13200	1995
Sep	15000	1800	195	13200	1995
Oct	15000	1800	195	13200	1995
Nov	15000	1800	195	13200	1995
Dec	15000	1800	195	13200	1995
Total	90000	10800	1170	79200	11970

Accounting Aspects of each month as Below:

We will use the following list of accounts with balances.

Nature Of Account	Account	Balance
Liability
	Salary Payable	0 Cr
	Provident Fund Payable	0 Cr
Expense
	Salary Expense	0 Dr
	Provident Fund Expense	0 Dr
Asset
	Bank	0 Dr

July Accounting Aspects:

Account	Dr	Cr
Salary Expense	18000
Salary Payable		13200
Provident Fund		1800
Provident Fund Expense	195
Provident Fund Payable		195
Salary Payable	13200
Bank		13200

August Accounting Aspects:

Account	Dr	Cr
Salary Expense	18000
Salary Payable		13200
Provident Fund		1800
Provident Fund Expense	195
Provident Fund Payable		195
Salary Payable	13200
Bank		13200

September Accounting Aspects:

Account	Dr	Cr
Salary Expense	18000
Salary Payable		13200
Provident Fund		1800
Provident Fund Expense	195
Provident Fund Payable		195
Salary Payable	13200
Bank		13200

October Accounting Aspects:

Account	Dr	Cr
Salary Expense	18000
Salary Payable		13200
Provident Fund		1800
Provident Fund Expense	195
Provident Fund Payable		195
Salary Payable	13200
Bank		13200

November Accounting Aspects:

Account	Dr	Cr
Salary Expense	18000
Salary Payable		13200
Provident Fund		1800
Provident Fund Expense	195
Provident Fund Payable		195
Salary Payable	13200
Bank		13200

December Accounting Aspects:

Account	Dr	Cr
Salary Expense	18000
Salary Payable		13200
Provident Fund		1800
Provident Fund Expense	195
Provident Fund Payable		195
Salary Payable	13200
Bank		13200

Account Balances at end of December:

Nature Of Account	Account	Balance
Liability
	Salary Payable	0 Cr
	Provident Fund Payable	11970 Cr
Expense
	Salary Expense	90000 Dr
	Provident Fund Expense	1170 Dr
Asset
	Bank	79200 Dr

Provident Fund Calculation and Payroll in OpenERP:

I am assuming that post reader install the hr_payroll module before implementation.

Major Steps:

1. Accounts creation
2. Partner Creation
3. Contribution Register
4. Allowance & Deductions Heads
5. Function and Salary Structure
6. Employee creation
7. Employee contract
8. Create Employee Payslip
9. Check Accounting Aspects and Contribution Register

Accounts Creation:

create the following accounts in openerp from Financial Management → Configuration → Financial Accounting → Financial Accounts → List of Accounts.

Acc Name	Code	Parent	Account Type	Internal Type
Chart	0		View	View
Bank	1	chart	Asset	Other
Salary Payable	2	chart	Liability	Payable
Salary Receivable	3	chart	Asset	Receivable
Salary Expense	4	chart	Expense	Other
Provident Fund Payable	5	chart	Liability	Payable
Provident Fund Expense	6	chart	Expense	Other

Partner Creation:

Create an employee as partner from Partners → Partners → New Partner providing following data.

Name: Mohsin Yaseen

Code: mohin

Supplier: Checked

Account Receivable: Select salary receivable.

Account Payable: Select salary payable.

Enter some information of contact (address) too.

Contribution Register:

Create a contribution register for provident fund from Human Resources → Configuration → Payroll → Contribution Register (Click new) providing following data.

Name: Provident Fund Register

Account: Select Provident Fund Expense

Provident Fund Deduction Head:

Create deduction head for provident fund from Human Resources → Configuration → Payroll → Allowance/Deduction Heads (Click new) providing following data.

Category Name: Provident Fund

Category Code: PF

Type: Deduction

Based on: basic

Condition: True

Contribute by Company: Selected

Amount Type: Fixed Amount

Contribution: 195

Contribution Register: Provident Fund Register

Function and Salary Structure:

Create a Employee function and salary structure for this function from Human Resources → Configuration → Payroll → Employee Function (Click new) providing following data.

Function Name: Consultant

Code: Con

Salary Structure

Name: Consultant Provident Fund Salary Structure

Code: CPFSS

Category: Provident Fund

Type: Deduction

Amount Type: Percentage (%)

Amount /Percentage: 12

General Account: Provident Fund Payable

Employee Creation:

Create an Employee from Human Resources → Employees → New Employee providing following data.

Employee: Mohsin Yasen

Active: Selected

Related User: Administrator

Home Address: Select the partner having name mohsin

Bank Account: Bank

Salary Account: Salary Expense

Employee Account: Salary Payable

Employee Contract:

Create an employee contract from Human Resources → Employees → Contract providing following information.

Employee: Select Mohsin Yasen

Contract Name: Consultant Contract

Function: Select Consultant

Working Hour / Days: 8

Working Days / Weeks: 5

Start Date: 07/01/2010

Wage Type: Monthly Basic Wages

Wage: 15000

Create Employee Payslip:

Create the employee Payslip for the months of july to dec 2010 from Human Resources → Payroll → Employee Payslip (Create New) providing following data (below data is in the form of monthly payslips).

July Payslip Data:

Employee: Mohsin Yaseen

Expense Journal: x Expenses Journal

Bank Journal: x Bank Journal

Date: 07/31/2010

Press Button: Compute Sheet, Verify Sheet,Complete HR Sheet, Complete Accounting Checking and Pay Salary.

Aug Payslip Data:

Employee: Mohsin Yaseen

Expense Journal: x Expenses Journal

Bank Journal: x Bank Journal

Date: 08/31/2010

Press Button: Compute Sheet, Verify Sheet,Complete HR Sheet, Complete Accounting Checking and Pay Salary.

Sep Payslip Data:

Employee: Mohsin Yaseen

Expense Journal: x Expenses Journal

Bank Journal: x Bank Journal

Date: 07/30/2010

Press Button: Compute Sheet, Verify Sheet,Complete HR Sheet, Complete Accounting Checking and Pay Salary.

Oct Payslip Data:

Employee: Mohsin Yaseen

Expense Journal: x Expenses Journal

Bank Journal: x Bank Journal

Date: 07/31/2010

Press Button: Compute Sheet, Verify Sheet,Complete HR Sheet, Complete Accounting Checking and Pay Salary.

Nov Payslip Data:

Employee: Mohsin Yaseen

Expense Journal: x Expenses Journal

Bank Journal: x Bank Journal

Date: 07/30/2010

Press Button: Compute Sheet, Verify Sheet,Complete HR Sheet, Complete Accounting Checking and Pay Salary.

Dec Payslip Data:

Employee: Mohsin Yaseen

Expense Journal: x Expenses Journal

Bank Journal: x Bank Journal

Date: 07/31/2010

Press Button: Compute Sheet, Verify Sheet,Complete HR Sheet, Complete Accounting Checking and Pay Salary.

Provident Fund Contribution Register: