How do I record a contribution towards pension of my staff in Zoho Books?
You need to record Pension contribution as an expense to your company. For that you need to create an expense account and a liability account to track the pension payable.
Create an expense in the newly created Expense account and pay for it through the newly created Liability account. Then, while actually paying the Pension amount, select the Liability account from the Expense Account drop-down. Please follow the steps below to do the same.
- Go to Accountant -> Chart of Accounts.
- Click New Account. Enter “Pension” as the Account Name and choose Expense under Expense section as the Account Type. Click on the Save button.
- Click on New Account. Enter “Pension Liability” as the Account Name and choose the Account Type as Other Current Liability under Liability section. Click on the Save button.
- Next, navigate to Purchases -> Expenses.
- Record the salary excluding pension as a separate expense.
- Create another expense with Pension as the Expense Account and Pension Liability as Paid Through.
- While paying the Pension amount, you can create an expense with Pension Liability as Expense Account and either Bank or Cash as the Paid Through account.