How to make a journal entry for social security contributions

Social security fees to do the journal entry accounting treatment when the enterprise will generally give the employee withholding and payment of social security fees, accounting can be included in the accounts payable to employees, and other receivables account.

Accounting entries for social security:

1. Payment of social security, accounting entries to be made.

Borrow: Employee compensation payable i.e. social insurance premiums (unit part), other receivables i.e. social insurance premiums (individual part).

Credit: bank deposits or cash on hand.

2. Accounting entries to be made when accruing.

Borrow: administrative expenses that is, social insurance premiums (unit part).

Credit: Employee compensation payable i.e. social insurance premiums (unit part).

3. When paying wages.

Borrow: payable employee remuneration i.e. wages.

Credit: other receivables i.e. social insurance premiums (individual part), bank deposits or cash on hand.

Other receivables: refers to all kinds of receivables and provisional payments other than financial assets bought for sale, notes receivable, accounts receivable, prepayments, dividends receivable, interest receivable, subrogation receivables, reinsurance receivables, reinsurance contract reserves receivable, long-term receivables, etc. of the enterprise.

Social insurance premiums:

Social insurance premiums refer to the fees paid by employees and employers to the social insurance administration organization in accordance with the prescribed amounts and deadlines in the process of raising the social insurance fund, and they are the most important source of the social insurance fund.

Social insurance premiums are paid according to different insurance programs, and their main payment methods include opening an account for payment by oneself, paying at the social security administration organization, and agreeing with the social security administration organization on other ways of payment.

From January 1, 2019, all social insurance premiums were handed over to the tax department for unified collection.

Social insurance must be based on the probability of occurrence of various risky accidents, and in accordance with the total amount of payment expenses estimated in advance by the standard of payment, to find out a certain percentage of the burden borne by the insured, as a criterion for determining the rate of insurance premiums.

And, unlike commercial insurance, the calculation of social insurance rates, in addition to risk factors, also need to take into account more socio-economic factors, to find a fair and reasonable rate.