How do i add TDS for an employee ??? DO i need to add the employee supplier as well ???

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When it comes to TDS deducted for employees, it is usually part of the salary. At present QuickBooks Online India version does not support Payroll and hence you will have to use the journal entry route to enter salary and TDS details paid/deducted for an employee. Please have the accounting entries listed below verified by your accountant. You would need to calculate the amounts for payroll components manually and then post them as journal entry. Before you can enter a pay-cheque, here is a sample list of accounts which need to be created in QuickBooks:

 Account Name                Type

 Basic Pay                         Expense 

Dearness Allowance         Expense 

HRA                                  Expense 

Medical Allowance           Expense 

Conveyance                     Expense 

Provident Fund                Current Liabilities 

TDS Payable                    Current Liabilities  (This account might already be there in your Chart of Accounts)

Payroll Liabilities              Current Liabilities

So, the deductions on the pay-cheque would be added as Current Liabilities and payments as Expenses.

To book the details of the salary components in QuickBooks, follow the steps below:

  1. Click on the Plus icon (Quick Create) in the top middle, then under Other, click Journal Entry.
  2. Enter the date on which you want to book the salary expense.
  3. In the Account drop down, select payment accounts (eg. Basic Pay, Dearness Allowance, HRA, etc... one by one and enter their amounts in the Debit column against them).
  4. Now, select the deductions accounts (eg. Provident Fund, TDS Payable, etc... one by one and enter their amounts in the Credit column against them).
  5. At the end select Payroll Liabilities accounts in the Account drop down and enter the difference of Payments and deductions amount in the credit column against it.
  6. Enter the memo for this journal entry (eg. "Recorded payroll liability for the month of xyz").
  7. Click Save and close.

When you actually make payments of the salary to your employees, follow the steps below:

  1. Click Transactions on the left menu and then Expenses.
  2. Click the Create New button and click Cheque.
  3. Enter the Cheque number (if applicable), select a date and then enter an amount.
  4. Select Out of Scope of tax from the Amounts are drop down.
  5. Under the Itemise by Account section, from the Account drop down, select Payroll Liability account and enter an Amount. Make sure the amount here is the same amount entered in Step 3.
  6. Click Save and close.
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