Pay Slip Components and PF Contribution Discussion - Insights on Salary Preparation

Dear All,

I am initiating the process of providing salary slips to our employees. We operate in the finance sector. Please guide me on how to design a salary slip, including the components and their calculations.

Regards,
Sheetal

Hi Sheetal,

Find enclosed one of the sample formats of the payslip. I hope it may help you to prepare the same.

Regards,
Amit Seth

Dear Ms. Sheetal,

Greetings!

The sample payslip:

Payment to the Candidate
- Particulars %age
- Basic 54%
- HRA 38%
- Conveyance 8%
Monthly Gross

- PF 12.00%
- ESI 1.75%

Total Deduction
Net Take Home Salary

Add
- PF 13.61%
- ESI 4.75%

Regards,
John N

Hi Shreekumar,

I would like to go for automating payslips, but we are only a few months old company. Our company is basically an 'investment advisory' one. It's a portfolio management company that provides all types of financial services to the investors.

To start with, we have 8 employees on the rolls. I also wanted to prepare an HR manual for this company. Can you help me out?

Thanks and regards,
Sheetal

Hi Sheetal,

It might have been a problem with the site that caused the uploads to not go through. Please find enclosed a sample format of the same. I hope it will help you in preparing the required documents.

Regards,

Amit Seth.

Hi Amit,

This will definitely help me a lot. One more question, for the calculation of 'Basic' - what percentage should be taken?

Regards,
Sheetal

Thank you. It is my pleasure that it helped you. It varies from company to company. Generally, the minimum starts from 30%, and it goes up to 50% or even 60%. The best would be between 30% and 40%.

Regards,
Amit Seth.

Hi,

You have mentioned that the employee's contribution towards PF is 12% of the total basic, and the employer's contribution is 13.61%. However, if I am not mistaken, the employee and employer contributions towards PF are the same. Instead, if the employee wishes, they can increase their contribution towards PF.

Please add your comments!

Regards,
Vijay

Dear Vijay,

Greetings!

I work for an outsourcing company where we deduct 13.61% for PF. However, the correct percentage for PF is 12%.

I hope this clarification resolves any doubts you may have.

Regards,
John N

Hi,

You have not mentioned the type of organization. Find out whether your organization comes under the purview of a factory or establishment. You have to follow the procedure laid out in the relevant provisions under the Act. Further, fill out all the content in the forms prescribed in the Acts, and if you want to add anything more than extra fields, you have to obtain prior approval from the authorities.

Maheswara Rao.CH

Hi,

According to the PF Act, the minimum employer contribution is only 12% of the total basic, but you have shown 13.61%. Kindly explain.

Waiting for your reply.

Regards,
Vijay

Dear Mr. Vijay,

Greetings!

Just to inform you that I have responded to your previous query.

Best regards,
John N

Hi Vijay,

Employee P.F. Contribution is 12% (on Basic + D.A.). Employer Contribution towards P.F. for each employee is as follows: Employer Contribution of 12% would be divided into 8.33% for the Pension scheme and 3.67% for the provident fund. Additionally, 1.1% goes towards administrative charges of the Employee Provident Fund (Employer contribution), 0.5% towards the Employee Deposit Linked Insurance Scheme (EDLIS) (Employer contribution), and 0.01% towards administrative charges of EDLIS (Employer contribution). In total, the employer contribution would come to 13.61%.

Maheswara Rao.CH
09848308694

Hi,

Ours is a financial services sector, which is actually an investment advisory company. We have 9 employees in total. Now, we are initiating the process of providing salary slips. Will PF and Gratuity apply? What components should I consider while creating the salary slips?

Regards,
Sheetal

Hi Muskan,

Welcome. It's my pleasure that it helped you. 😄

The contents of the salary break up are as below; you can prepare it as per your suitability. Basic may be 30 to 50 or 60% of the gross. HRA would be 40 to 60% of basic.

- Basic
- HRA
- CCA - 825/- is exempted from tax
- Other Allowance
- Mobile Reimbursement
- Medical Reimbursement of 1250/month is exempted from tax
- Gross Per Month = Sum of all the above.
- Gross Per Annum = 12*Gross/Month
- PF Contribution = 12% of Basic/Annum
- ESI Contribution = 4.75% of Gross/Annum
- Medical = The mediclaim facility provided to employees who are not covered under ESI, as the maximum ceiling for ESI is 10000/Month. Getting more than this will be covered under Mediclaim or it depends on company policy.
- Ex-Gratia/Bonus = A fixed amount as Bonus
- Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
- Annual Total Cost = AFGC + PF + ESIC
- Annual total cost is also called CTC.

Apart from this, Food coupons, Holiday package, and Furnishing items are included in their CTC.

Hope this clears your queries to some extent.

Regards,
Amit Seth.

Hi Amit,

How are you? Your mail helped me with the salary slip format. I am in the BPO industry. Can you provide some more types of salary formats so that I can create my own?

Please help me understand how much percentage should be allocated to the basic salary if 12% of PF would be deducted from the basic. For example, if an employee has a gross salary of 10,000 per month, what should be the basic amount?

Regards,
Muskan

Hi Friends,

I am Mohamed Fazal, working as a software developer. I would like to inform you that I am currently constructing an Automated HR System for Payslip and Employee Time Tracking. If anyone is interested, please contact me at rbmf.info@yahoo.com.

With regards,
Mohamed Fazal

Hi all,

How are you? Can you please email me the salary slip format with deductions? Could you also provide some more types of salary formats so that I can customize my own and create them?

Thank you for your helpful assistance.

Geetha :icon1: