Managing payroll accounting is a crucial task for any organization, regardless of its size. The process is complex and time-consuming, involving calculations of salaries, bonuses, taxes and employee benefits. In the writing, Viindoo will introduce what payroll accounting is, the accounting process, common challenges, and how Viindoo software helps simplify this task.
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Accounting for salaries and salary deductions
Payroll accounting is the process of recording economic transactions related to the payment of salaries to employees into the enterprise's accounting system. The purpose of this is to track salary costs, payroll deductions, and amounts payable to employees accurately and completely.
Related accounting accounts salary accounting:
- Account 334 - Payables to employees: This account is used to record salaries, bonuses, allowances and other amounts payable to employees.
For example: When a business calculates salaries for employees, there will be an entry: Debit Account 642: Salary expenses; Credit Account 334: Payables to employees
- Account 338 - Payable insurance and social benefits: This account is used to record deductions based on employees' salaries to pay social insurance, health insurance, unemployment insurance, union dues, and other benefits.
For example: When a business deducts insurance benefits from employees' salaries, there will be an entry: Debit Account 334: Payables to employees; Credit Account 3383: Social insurance payable; Credit Account 3384: Health insurance payable; Credit Account 3386: Unemployment insurance payable; Credit Account 3388: Payable contributions
Salary accounting is an important process of a business
Instructions on how to fully account for salary costs
Accounting for employee salaries
Accounting for operations related to salaries and bonuses:
- Record salary expenses and make payroll deductions:
- Direct salary costs:
- Debit Account 241 (Construction in progress): For salary costs of employees directly involved in production.
- Debit Account 154 (Cost of production and business in progress) or Account 642 (Cost of goods sold): For salary costs of employees directly engaged in production and business (according to Circular 133).
- Indirect salary costs: Debit Account 622, 623, 627 (Enterprise management costs), Account 641 (Sales costs) or Account 642 (Cost of goods sold): For employee salary costs indirect pills.
- Correspondence for all of the above cases: Credit Account 334 (Payables to employees - 3341, 3348): Record the total salary payable to employees.
- Accounting for bonus payments from the bonus fund:
- When appropriating the reward fund:
- Debit Expense account (corresponding to the type of expense appropriated to the fund): Record expenses appropriated to the reward fund.
- Credit Account 3531 (Reward Fund): Recorded increase in reward fund balance.
- When paying rewards:
- Debit Account 3531: Recorded decrease in bonus fund balance due to payment.
- Credit Account 334: Record bonuses payable to employees.
Accounting for employee salaries related to salaries and bonuses
Accounting for salary and bonus costs
Accounting when businesses pay salaries, salary advances and bonuses to employees:
- Payment of salary/salary advance by cash/transfer:
- Debit Account 334: Record the amount of salary/salary advance paid.
- Credit Account 111, 112: Record payment source.
- Payment of salaries by goods and products:
Option 1 (Price without VAT):
- Debit Account 334: Record salary value in goods/products.
- Credit Account 3331 (VAT payable - 33311): Record output VAT (if any).
- Credit Account 5118 (Other revenue): Record value of goods/products without VAT.
Option 2 (Price includes VAT):
- Debit Account 334: Record salary value in goods/products (VAT included).
- Credit Account 5118: Record value of goods/products including VAT.
- Bonus payment:
- Debit Account 334: Record the bonus amount paid.
- Account 111, 112,... (Cash in fund, Bank deposits,...): Record the source of bonus payment.
Accounting for salaries and bonuses for employees
Accounting for insurance deductions based on salary
Percentage of deductions based on salary
According to Decision 595/QD-BHXH and Official Dispatch 2159/BHXH-BT of Vietnam Social Insurance applicable from June 1, 2017, then:
Salary deductions | Deducted into business expenses | Deducted from employee's salary | Total |
Social insurance (social insurance) | 17,5% | 8% | 25,5% |
Health insurance (health insurance) | 3% | 1,5% | 4,5% |
Unemployment insurance (UI) | 1% | 1% | 2% |
Total | 21,5% | 10,5% | 32% |
Trade union fees | 2% | 2% |
Thus, every month, businesses must pay to the Social Insurance agency 32% of the total salary fund payable to employees (social insurance, health insurance, unemployment insurance, occupational accident and occupational disease insurance). In addition, dEnterprises must pay 2% of the salary payable to employees to the District Labor Federation in case a union is established.
Included in business expenses
Total insurance amount payable by the business = 21.5% x Total salary fund participating in insurance:
- Debit Account 241, 622, 623, 627, 641, 642: Total insurance amount + Trade union fees payable by the enterprise
- Credit account 3383 (social insurance): 17.5% x Total salary fund participating in insurance
- Account 3384 (Health Insurance): 3% x Total salary fund participating in insurance
- Account 3386 (UI): 1% x Total salary fund participating in insurance
- Credit Account 3382 (Contribution): 2% x Total insurance salary fund (if any)
Enterprises must pay the Social Insurance agency 32% of the total salary fund payable to employees
Deducted from employee salary
Total employee insurance amount payable = 10.5% x Total insurance salary fund:
- Debit Account 334: Total employee insurance payable
- Account 3383 (social insurance): 8% x Total salary fund participating in insurance
- Account 3384 (health insurance): 1.5% x Total salary fund participating in insurance
- Account 3386 (UI): 1% x Total salary fund participating in insurance
Accounting for other deductions from salary
Advance salary for personnel
During the period, if the employee advances salary, the accountant needs to compare and determine the exact amount of advance. This amount will be deducted directly from the salary payable at the end of the period, and recorded with the following entry:
- Debit Account 334: Record a decrease in the amount payable to employees in advance.
- Credit account 111, 112 (Cash in fund, Bank deposit): Record the reduction in cash or bank deposit corresponding to the amount advanced.
Personal income tax (PIT) must be paid
During the accounting period, if personnel incur personal income tax payable, the accountant will perform the following steps:
- Determination and deduction of personal income tax: Accurately calculate the amount of personal income tax that must be deducted from the employee's salary and record it with a journal entry:
- Debit Account 334: Record a decrease in salaries payable to employees due to tax deduction.
- Credit Account 3335 (Personal Income Tax): Record the amount of personal income tax deducted, which is the amount the enterprise owes to the tax authority.
- Pay personal income tax on behalf of employees: Pay the deducted personal income tax to the state budget and record it by entry:
- Debit Account 3335: Record a decrease in the amount of corporate tax owed to the tax authority due to payment.
- Credit account 111, 112: Record the reduction in cash or bank deposit corresponding to the tax amount paid.
Accurately calculate the amount of personal income tax that must be deducted from the employee's salary and record it in a journal entry
How to account for employee salary payments
Accounting relies on the salary payment table, salary slip or bank payment documents to make the following entries:
Actual salary paid = Total salary, allowances, bonuses - Insurance payable - Deductions from salary (advance, personal income tax)
Accounting:
- Debit Account 334: Record actual salary payments.
- Credit Account 111, 112: Record payment source.
If there is a case of paying employees with goods or products, the accountant must issue an invoice to record internal sales revenue and account:
- Debit Account 334: Record salary value in goods/products.
- Credit Account 5118: Record sales value of goods/products (selling price excluding VAT).
- Credit Account 3331: Record output VAT on the value of goods/products (if any).
Accounting for insurance payments
Every month, businesses deduct salaries to participate in social insurance, health insurance, unemployment insurance, and community insurance (if any) from the total salary fund payable to employees. Accounting:
- Debt to account 3383 (social insurance): 25.5% x Total salary fund participating in insurance
- Debt Account 3384 (Health Insurance): 4.5% x Total insurance salary fund
- Debt Account 3386 (UI): 2% x Total insurance salary fund
- Debt to Account 3382 (Contract): 2% x Total insurance salary fund (if any)
- Account 111, 112: Total insurance amount + union fees payable
How to account for social insurance payable to employees
Accounting for operations related to employee maternity and sickness benefits:
- Recording advance payments for sickness benefits and maternity benefits:
- Debit Account 3383 (Payable to social insurance): Record the amount of maternity and sickness benefits that the enterprise advances to employees.
- Credit Account 334: Record a decrease in salaries payable to employees due to advance benefits.
- Record the transferred social insurance amount:
- Debit Account 112 (Bank deposits): Record the amount of sickness and maternity benefits that social insurance has transferred to the business's account.
- Credit account 3383: Record a decrease in the amount of money the enterprise owes to social insurance due to having received a refund.
- Payment of sickness and maternity benefits for employees:
- Debit Account 334 (Payables to employees): Record the amount of maternity and sickness benefits paid to employees.
- Credit: Account 111 (Cash in fund) or Account 112 (Bank deposits): Record the source of payment.
Accounting for operations related to maternity and sickness benefits of employees
Viindoo - Comprehensive salary accounting software
Viindoo salary accounting software brings many important benefits when applied to an organization's salary accounting process. Below are the strengths of using Viindoo accounting software:
Automate the collection of salary data from multiple sources
Viindoo accounting software automatically synthesizes the information needed to calculate salary from many different sources. This allows for the integration of information from HR-related systems. For example, timekeeping management, overtime, meal management and employee benefits. All these details contribute to the accurate calculation of the employee's salary.
Collecting salary data from multiple modules
Set up salary calculation rules
Viindoo helps businesses create unique payroll rules, saving time and ensuring consistency.
While installing this accounting software, managers only need to set up basic salary elements, allowances, deductions, and create a salary calculation formula only once. These regulations then become the basis for future salary calculations.
This eliminates the need to manually recalculate wages each pay period, saving time and reducing the risk of errors.
Salary rule in Viindoo software establish once
Decentralize personal management
Viindoo software provides self-checkout options for employees, allowing them to view personal pay slips, update personal information and request leave. All of this information will be kept confidential and only the payroll manager will have access and feedback.
Regularly update state regulations
Viindoo also automatically updates state regulations related to wages, insurance and personal income taxes. This ensures that the organization stays compliant with the latest government guidelines and regulations.
Amendments and additions to regulations are updated immediately in this accounting software. This helps ensure accuracy in salary calculation, insurance payment and personal income tax deduction.
Updating state regulations instantly
Automatically calculate salary diary
Viindoo integrates salary modules into the accounting system to automatically create salary-related entries. This integration helps optimize the accounting process and ensure accuracy and efficiency in accounting for salary transactions.
All records and edits on the payroll will be checked and updated to recalculate the final accurate figures.
Additionally, the integration provides real-time updates. Any changes made in payroll. Salary adjustments, bonus payments or tax updates, for example, are all reflected immediately in accounting entries. This real-time synchronization ensures that financial reports always reflect the most current payroll information.
Real-time reporting
Viindoo accounting software provides real-time access to salary reports. This feature allows users to be authorized. Human resources managers and finance staff, for example, instantly retrieve up-to-date information related to employee compensation and payroll.
Through Viindoo's intuitive user interface, users can create and access various types of salary reports in just a few clicks. These reports include a variety of data, including individual employee earnings, deductions, bonuses, tax deductions, and other related components. Reports can be customized based on specific criteria, such as date range, department or employee, providing a tailored overview of compensation-related data.
Real-time salary reporting offers several advantages. It enables your business to make timely decisions, whether it's assessing the financial impact of salary adjustments, tracking overtime costs, or analyzing workforce bonus allocations. dynamic. This timely access to data ensures that stakeholders have an accurate understanding of the financial aspects related to salary costs.
Salary accounting is an important and complex aspect of corporate financial management. However, the process is not easy, especially with tax and legal difficulties and reliance on accurate data. Managing salaries and performing salary accounting effectively is something that every company needs to pay attention to right now. Contact Viindoo to find the solution
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