The case study here is that of a local manufacturer of bidis. Let us say I am the owner, and I have a Admin Manager and an admin staff as employees.
I hire contractual workers and pay them as per their production. In this case study we will be focusing only on this payment pattern for such employees. For both regular and contractual employees.
Here we have created Group ledgers as admin and contractual workers. Under Admin, we will have the two employees and contractual workers group where we can keep adding the workers who would work under contract and pay them as per their productivity.
Let us first create an Employee Group Admin as,:-
then the second step being :-
Once the Define salary details is set to Yes , we will add the salary structure of the admin group as:-
This is created by going to the Pay head field and creating a Ledger for Basic salary ( ALT-C)
Similarly Other pay-heads are created as follows:-
Also we create a ledger for canteen subsidy to be provided, this canteen subsidy for the contract employees is based on the fact that more the worker produces the more is his subsidy. for instance when the value of work exceeds Rs. 10,000 then he is liable for a total subsidy on lunch.
The other pay heads of statutory are shown as :-
The Employee PF is created as:-
Let us make one more Payhead for the number of pieces made per month- this is a variable pay for the worker based on his production, this is created as:-
One more ledger for salary payable is created as :-
We have two employee groups as :-
The contract workers group with the Payheads is shown as :-
Now we come to the case where we create the employees under the Admin group and one worker under the Contractual workers
The Units are created as:-
The attendance type is selected as – Present for the employees and for the workers it would be based on the number of pieces produced
Now let us create the admin Manager’s salary created as :-
Now the other employees’ structure is created as:-
Now we will actually pass the vouchers of Payroll, first of attendance and then of payroll for salary
Now create the voucher for Payrol, as :-
Now this is shown as:-
Now let us create it for contractual employees, first the attendance is set for the number of items produced. Then the Payroll voucher is processed.
Now let us view the balance sheet as we have shown only the payment vouchers for payroll we see a clear liability report as
This shows that the Duties & Taxes is 1195 ( Income Tax of the two employees)- the 2nd employee does not have to pay any income tax as the slab.
The employee PF is shown as :-5715 ( 3819 + 1896) for the two employees.
Professional Tax – 400 ( 200 for two employees)
Salary payable – Rs. 47322( consisting of salaries of all employees including contractual worker)
The canteen expense is shown as Rs. 500 as this amount is given as a subsidy to the worker.
Please let us know your feedback of article or the business problems you are facing, we will try to solve them as a case.
*Please note that the article is only for an educational purpose, the author holds no responsibility whatsoever.