Quick answer: To pass a salary entry in TallyPrime without the payroll module, open a Journal voucher (Alt+G > Create Voucher > F7). Debit Salary (gross pay) and the employer PF and ESI expense ledgers; credit Salary Payable (net pay) and PF, ESI, Professional Tax and TDS Payable. Save with Ctrl+A. When you pay, use a Payment voucher (F5): debit Salary Payable or each statutory payable and credit Bank.
Many businesses keep their books in TallyPrime but calculate salaries elsewhere, in Excel or in payroll software, and then post one salary entry a month. This guide shows that entry step by step, with an example that includes PF, ESI, professional tax and TDS: the ledgers to create and the groups they belong under, the journal voucher, the payment vouchers, and variations such as wages, salary paid directly and salary advances. For the general accounting logic behind each line, see our salary journal entry guide; for running full payroll inside TallyPrime with employees and pay heads, see payroll in Tally Prime.
Journal voucher or payroll voucher?
| Journal voucher (F7) | Payroll voucher (Ctrl+F4) | |
|---|---|---|
| Needs the payroll module | No | Yes (Maintain Payroll enabled) |
| Who calculates salary | You, outside Tally (Excel or payroll software) | TallyPrime, from pay heads and attendance |
| Level of detail in Tally | Totals for the month, or one line per employee if needed | Every employee and pay head |
| Payslips and PF/ESI reports from Tally | No | Yes |
| Best for | Small teams or salary processed elsewhere | Businesses running payroll fully in Tally |
The accounting result is the same either way. This guide covers the journal method.
Step 1: Create the salary ledgers
Create each ledger from Alt+G > Create Master > Ledger, choosing the group in the Under field:
| Ledger | Under | Notes |
|---|---|---|
| Salary (or Salaries and Wages) | Indirect Expenses | Office and administrative staff |
| Wages | Direct Expenses | Workers directly engaged in production, if you show them in gross profit |
| Employer's Contribution to PF | Indirect Expenses | Employer EPS + EPF share |
| PF Admin and EDLI Charges | Indirect Expenses | Administration charges and EDLI |
| Employer's Contribution to ESI | Indirect Expenses | Employer 3.25% |
| Salary Payable | Current Liabilities | Net pay owed to employees |
| PF Payable | Duties & Taxes | Type of duty/tax: Others |
| ESI Payable | Duties & Taxes | Type of duty/tax: Others |
| Professional Tax Payable | Duties & Taxes | Type of duty/tax: Others |
| TDS on Salary Payable | Duties & Taxes | Type of duty/tax: Others when salary TDS is not processed through Tally's payroll or TDS features |
| Salary Advance | Loans & Advances (Asset) | Advances recoverable from employees |
TallyHelp's payroll guide places PF and ESI payables directly under Current Liabilities; either group works. Keep one payable per authority so each one can be matched with its challan. Groups can follow your own chart of accounts, but expenses must sit in an expense group and payables in a liability group.
Step 2: Salary entry in Tally with example
We use the October 2026 payroll from our salary journal entry guide: two employees in Karnataka, Riya (gross ₹40,000) and Arjun (gross ₹18,000). The payroll register totals are:
| Item | Amount (₹) |
|---|---|
| Gross salary | 58,000 |
| Employee PF (12% of PF wages ₹25,000 + ₹15,000) | 4,800 |
| Employee ESI (0.75% of ₹18,000, Arjun only) | 135 |
| Professional tax (Riya) | 200 |
| TDS (Riya) | 1,500 |
| Net salary payable | 51,365 |
| Employer PF (EPS + EPF) | 4,800 |
| EDLI ₹200 + PF administration charges (₹500 establishment minimum) | 700 |
| Employer ESI (3.25% of ₹18,000) | 585 |
The PF wage ceiling is ₹25,000 a month from 17 September 2026 (PF wage ceiling guide), and ESI applies to employees earning up to ₹21,000 (ESIC contribution rates).
Step 3: Pass the salary journal entry in Tally (salary payable entry)
- Press Alt+G > Create Voucher, then F7 (Journal). Set the date to 31 October 2026 with F2.
- Enter the debit lines: Salary, Employer's Contribution to PF, PF Admin and EDLI Charges, Employer's Contribution to ESI.
- Enter the credit lines: Salary Payable, PF Payable, ESI Payable, Professional Tax Payable, TDS on Salary Payable.
- Check that the debit and credit totals match, add a narration such as "Salary for October 2026 as per payroll register", and press Ctrl+A.
Depending on the voucher configuration (F12), TallyPrime shows lines as By/To or Dr/Cr; the entry is the same. The voucher looks like this:
| Dr / Cr | Ledger | Debit (₹) | Credit (₹) |
|---|---|---|---|
| Dr | Salary | 58,000 | |
| Dr | Employer's Contribution to PF | 4,800 | |
| Dr | PF Admin and EDLI Charges | 700 | |
| Dr | Employer's Contribution to ESI | 585 | |
| Cr | Salary Payable | 51,365 | |
| Cr | PF Payable (4,800 + 4,800 + 700) | 10,300 | |
| Cr | ESI Payable (135 + 585) | 720 | |
| Cr | Professional Tax Payable | 200 | |
| Cr | TDS on Salary Payable | 1,500 | |
| Total | 64,085 | 64,085 |
If you want employee-wise detail in Tally, create a ledger for each employee under an Employee Salaries Payable group, and split the credit by employee, as shown below. For most businesses the monthly total, backed by the payroll register, is enough.
Employee-wise version
Some businesses want each employee's net pay visible in Tally, for example to track who has been paid. Create a ledger for each employee under a new group called Employee Salaries Payable (under Current Liabilities) and split the net pay credit:
| Dr / Cr | Ledger | Debit (₹) | Credit (₹) |
|---|---|---|---|
| Cr | Riya – Salary Payable (40,000 − 3,000 PF − 200 PT − 1,500 TDS) | 35,300 | |
| Cr | Arjun – Salary Payable (18,000 − 1,800 PF − 135 ESI) | 16,065 |
These two lines replace the single Salary Payable credit of ₹51,365; the debits and the statutory credits stay the same. Each employee's payment then debits his or her own ledger. With more than a handful of employees this becomes hard to maintain, which is the point at which the payroll module or a separate payroll system makes more sense.
Check the entry in reports
After saving, open the Day Book (Alt+G > Day Book) to see the voucher, and the Trial Balance to confirm that Salary shows ₹58,000 and each payable shows the expected credit balance. Once the October dues are paid in November, the October balances in these payable ledgers should be nil. Use the ledger display of each payable to match it with the challans.
Step 4: Record the payments
Record each payment on the day it is made with a Payment voucher (Alt+G > Create Voucher > F5):
| Payment | Due by | Debit ledger | Credit ledger | Amount (₹) |
|---|---|---|---|---|
| Net salary | 7 November | Salary Payable | Bank | 51,365 |
| TDS on salary | 7 November | TDS on Salary Payable | Bank | 1,500 |
| PF challan | 15 November | PF Payable | Bank | 10,300 |
| ESI challan | 15 November | ESI Payable | Bank | 720 |
| Professional tax | 20 November (Karnataka) | Professional Tax Payable | Bank | 200 |
Mention the challan or transaction reference in each narration. After these vouchers, every payable ledger for October should show a nil balance; any balance means a short payment, an excess payment or a posting error. Our payroll reconciliation guide explains how to trace it.
Other salary entries in Tally
Salary paid directly (no deductions)
For a small business that pays salary on the last day of the month with no PF, ESI, PT or TDS, one Payment voucher is enough:
| Dr / Cr | Ledger | Debit (₹) | Credit (₹) |
|---|---|---|---|
| Dr | Salary | 25,000 | |
| Cr | Bank | 25,000 |
Wages journal entry in Tally
Use the Wages ledger under Direct Expenses in place of Salary, with the same payable ledgers. Daily-wage totals from the attendance or muster roll go in as one monthly entry, or weekly if wages are paid weekly.
Salary advance and recovery
When an advance of ₹5,000 is paid on 15 October, record a Payment voucher: debit Salary Advance, credit Bank. If it is recovered from October salary, add a credit line of ₹5,000 to Salary Advance in the salary journal and reduce Salary Payable to ₹46,365. Salary expense stays at ₹58,000.
Salary for March paid in April
Pass the journal dated 31 March so the expense and payables fall in the right year, and the April payment vouchers clear them. Year-end provisions for bonus, gratuity and leave are separate; see our payroll provisions guide.
Salary entry in Tally ERP 9
The entry is identical in Tally.ERP 9. Create the ledgers from Gateway of Tally > Accounts Info. > Ledgers, open the Journal voucher from Gateway of Tally > Accounting Vouchers > F7, and the Payment voucher with F5. Only the menus differ.
Common mistakes
- Debiting salary with net pay: salary expense must be the gross amount; deductions are credited to payables.
- Posting employer PF as a deduction: the employer's share is an extra expense, debited to its own ledger.
- Payables under expense groups: PF, ESI, PT and TDS payables belong under current liabilities, not expenses.
- Paying salary directly from the expense ledger after accruing it: once salary is in Salary Payable, the payment must debit Salary Payable, or the expense is counted twice.
- One combined statutory ledger: a single "statutory dues" ledger makes it impossible to see which challan is unpaid.
Get the monthly totals for your Tally entry. The Complete Indian Payroll Excel Workbook calculates salary, PF, ESI, PT and TDS and gives you the register totals to post as one journal voucher.
Frequently asked questions
How do I pass a salary entry in Tally Prime?
Without the payroll module, open a Journal voucher with Alt+G, Create Voucher and F7. Debit the Salary ledger with gross salary and the employer contribution ledgers, and credit Salary Payable with net pay and separate ledgers for PF, ESI, professional tax and TDS payable. Save with Ctrl+A, then record each payment in a Payment voucher with F5.
Which group should the salary ledger be under in Tally?
Office and administrative salaries are normally created under Indirect Expenses. Wages of workers directly engaged in production are often created under Direct Expenses so they form part of gross profit. Salary Payable and the statutory payables go under Current Liabilities, with PF, ESI, PT and TDS usually under Duties and Taxes.
What is a payroll voucher in Tally?
A payroll voucher is a special voucher type in TallyPrime, opened with the payroll voucher shortcut Ctrl+F4, that records salary using the payroll module's employees and pay heads. It calculates each employee's earnings and deductions when you use Payroll Autofill. If you do not use the payroll module, the same accounting effect is recorded with a journal voucher.
Can I pay salary directly from bank without a salary payable entry in Tally?
Yes. If salary is paid on the last day of the month and there are no deductions, a Payment voucher (F5) debiting Salary and crediting Bank is enough. When there are PF, ESI, PT or TDS deductions, or salary is paid in the next month, record the journal first so the expense and each payable are in the right month.
Is the salary entry the same in Tally ERP 9?
The accounting entry is the same. In Tally.ERP 9 you open the Journal voucher from Gateway of Tally, Accounting Vouchers, F7 Journal, and the Payment voucher with F5. Menu layout differs from TallyPrime, but the ledgers and debits and credits do not change.
Position as of 15 November 2026. Keys and menus follow TallyPrime release 7.x as described on TallyHelp; rates and due dates as they apply to private-sector employers. TallyPrime is a trademark of Tally Solutions Pvt. Ltd.; HR Calcy is not affiliated with it. General information, not accounting, tax or legal advice.