Employers ESI contribution on total Wages

[Former Member]

Dear Experts ,

need your help on my issue

I searched the SCN but did not find an apppropriate solution, rather no thread on such issue..

Issue is, when client uploads the ESIC  wages sheet on the ESIC website , the website calculates individual EE ESI of 1.75%  and on the other hand it calculates 4.75%  on the total wages of all employees .

but this does not happen in SAP system, coz when i run Payroll posting , the ESIC payable shows seperate individual calculations of EE ESI of 1.75% which is fine , but it also calculates seperate Employer's contribution of 4.75% for each individual . which should not happen and instead the 4.75% should happen on the total of all wages of employees or lumpsum amount .

hope i am clear..

plz help its quite urgent

thank you all

Arun

[Former Member · Accepted solution]

Hi Arun,

I think this is a strange problem you face. Can you please tell me which wage type is post in Er. cont. ESI GL ? I think /3E2 it is.

Now I you don't want to post Er. Cont. ESI wage type in FI then just change the configuration of Symbolic account for the wage type.

Thanks

[ankitvasavada · Accepted solution]

Agree with Rabi

Thats what I was saying earlier that you remove the mapping with simbolic account mapping from Er. Comtribution to ESI wagetype and tell the person who is responsible to make ESI payments on web site. that manually enter the ammount populated on website to FI.

only thing needs to remember that they have to make entry in expence and balancesheet both.

hope this works because it is working for my client.

Regards

Ankit Vasavada

[Former Member]

Hi Rabi and Ankit

Well it is infact /3E2 only .

and do you mean , i should remove the posting characteristics of wage type  or remove only the  GL assignment ?  or remove both ?

but by doing this , wont i get an error wile i try posting ? like,  no symbolic account assigned or no GL account assigned  for /3E2 ?

Besides , why there is no standard solution for this problem because it is statutory requirement ? or at least a custom one.

please advise

Than you

Arun

[ankitvasavada]

Dear Arun

For first question. System will not prompt you for the error. as system will prompt if debit and credit does not match, here we are not doing any entry. neither debit or credit.

second Question is that there can not be a standard solution because even if SAP gives you sum of employer contribution of all employees then also it may not match with ESI website. as these are two different system. and from FI pointof view and reporting point of view we have to show the amount which is genrated by ESI website.

Correct me if I am wrong. may be it will take some time to develop standard one as these changed from ESIC came this year only.

Hope I can make a point.

Thanks and regards

Ankit Vasavada

[Former Member]

Hi Arun,

Is this problem also come when you run payroll? Or only the time of payroll posting?

Thanks

[Former Member]

Hi Rabi,

Well the posting results is nothing but the output of payroll itself . so after i run payroll , i directly go to positng the payroll results ,and  there when i check ESIC payable , the calculations are already done.

so i guess its not problem in payroll posting as such.

Regards

arun

[Former Member]

Hi Arun,

There are lot of difference between payroll result and posting result. So please confirm esic calculate correctly in payroll result or not.

Thanks

[Former Member]

Hi Rabi,

Well as per your suggestion, i didi check payrolll results.  there, EE ESI contribution is showing correct, where as , there is no Employer contribution shown as such in RT table.

so, as i told you earlier , the employer contribution is shown during posting run only .

could you guide further in this case ?

Thank you

Arun

[Former Member]

Dear Experts

Plzzzz need help in this issue.. its a statutory requirement , i am sure there must be sum solution , kindly help me , i am unable to figure out a solution for this and all my hopes are on you pplz..

Thank you

Arun

[ankitvasavada]

Got your point Arun

But this is the way standard system works. I am not sure there is any other solution then to customize the function INESI.

But let me understand this you want to do to match the result genrated by site and SAP right??

Regards

Ankit Vasavada

[Former Member]

Hi ,

Yes ankit i want to match the ESI website total and SAP total of  ESIC Payable for accounting purposes , because every time client cant pass difference amount accounting entry.

Can you further guide as how to customize INESI ..

but one thing i am not getting , how are the other indian comapnies, who run SAP, wrk den ?  is it only my issue ? coz this is how ESIC website produces results , which does not match SPA results .

Thank you

Arun

[ankitvasavada]

Dear Arun

What I am doing for my client is I am posting only Employee contribution from SAP payroll and Employer contribution FI team creating a entry in FI directly.

you can go to PE04 and put function INESI and copy the same to some Z name and with the help of ABAPer you can do the required changes.

Hope this help.

Regards

Ankit Vasavada

[Former Member]

Hi Ankit ,

Thanks for the logic you have asked me to follow..

well i have put this issue beofre abaper, as of now no output as such but, certainly working on the same .

If u can provide some xtra info on where xactly changes need to be done then dat would be helpful.

Thank you

Arun

[ankitvasavada]

Dear Arun

The place ABaper need to find out with debugging.

I think where Employer contribution is getting genrated by calulating 4.75% of ESI basis. there we can put a loop of all employees and put the variable for adding esi basis and put value in a custom wagetype and we map that custim wagetype in FI posting.

You can try writing PCR also. where you can add all the employee esi basis wagetype in to a custom cumlative wagetype and put 4.75% in final wagetype and map that wagetype to FI posting.

need to look in to PCR as I am also new to PCR.

I think this will work.

Regards

Ankit Vasavada

[Former Member]

Dear Experts ,

Can any one plz provide a solution for this ?  or there is no solution at all ?

Thank you

Arun

[ankitvasavada]

Dear Arun

There are two parts of this

1. You do not want the payroll to genrate employer contribution

Or

2. you do not want to post employer contribution to Finance.

as per Standard function INESI it genarated both the wagetype for employee contribution(1.75%) and employer contribution(4.75%). which will get added and employee contribution goes to expence and employer contribution goes to liability.

Regards

Ankit Vasavada

[Former Member]

Hi Ankit,

Thank you for your relpy , but i think u have mistaken my issue.

my issue is , when we run payrol posting , and in dat when i check ESIC payable , in that , the system has calculated 1.75% of EE contribution for each employee's individual ESI basis , and the same type of calculation has been done for Employer contribution too ..  but in reality or when client uploads the total wages on the ESIC website , there what happens is , the ESIC website calculates 1.75 % of each EE 's individual  ESI basis but , when it comes to Employer contribution , the ESIC website calculates 4.75 % on the total of all employyees ESI basis amount.

For example .. i will take 3 EE total ESI basis amount that wil be uploaded on ESIC website

1) 10000

2) 15000

3) 20000

on website the calculation will be 1.75 %  on 10000  = 175

                                                 1.75%  on  15000 =  263

                                                  1.75% on 20000 =   350

Total will be                                                     -------------------

                                                                                788    This will be EE contribution

when it comes to Employer contribution , the 4.75%  should be not on 10000 or 15000 0r 20000  but on total of all i.e  45000 * 4.75%

Hope you got me now ..

Thank you

Arun