Calculation Of Esi & Pf

Hi to all,
currently i am working as a HR- Recruiter in a MNC company ,and i has decided to move to HR - Generalist profile so i am in need of clear information about the ESI & PF

Hi Sathish,
ESI is contributed from both the sides Employee as well as Employer.
It is been calculated on the basis of Gross salary per month and the maximum ceiling is 10000 Rs./Month.
The contribution from both the sides is as below-
Employee Side- 1.75% of gross/month
So if gross of an employee is 8000/month then
ESI contribution would be 8000*1.75% = 140 Rupees
Employer side- 4.75% of gross/month
ESI contribution would be 8000* 4.75% = 380 Rupees.
Whereas, PF is also been paid from both the sides.. Both the employer as well as employee is required to pay the 12% of basic salary..
Out of this 12% of employer's contribution 8.33% goes to Pension fund whereas rest 3.67% goes to the PF Fund itself..
Regards,
Amit Seth.

thanks for the nice expl. but i have a doubt, i think employee gives 8.33% and 3.67% to Pension and pf respectively, not employer.
Plz correct me if i am wrong
Regards,
Sharad

dear sharad,

ESI

eMPLOYEES CONTRIBUTION - 1.75 % ON THE TOTAL WAGES HE/SHE EARNED IN THE MONTH.tHIS SHOULD BE ROUNDED TO NEAREST RUPEE.THAT IS TO SAY IF THE ESI AMOUNT COMES AS RS.8.01 then the contribution deducted as Rs.9.00.and if the contribution is RS.8.99 then the deductible amount is Rs.9.00 SIMILARLY THE EMPLOYER CONTRIBUTION AT 4.75% IS TO BE CALCULATED INDIVIDUALLY. AND THE TOTAL RECOVERY OF 1.75 AND COMPANY CONTRIBUTION 4.75% ARE TOBE PAID IN ONE CHALLAN ON OR BEFORE 21ST OF THE SUBSEQUENT MONTH.

P.F.

THE DEDUCTION AND CONTRIBUTION AT 12% IS EXPLAINED BY WAY OF AN EXAMPLE.

SALARY FOR THE MONTH RS.6500

EMPLOYEE CONTRIBUTION(TO BE DEDUCTED FROM SALARY)

6500 X 12% = 780

EMPLOYER'S CONTRIBUTION (NOT TO BE DEDUCTED FROM SALARY)

FAMILY PENSION SCHEME = 6500 X8.33% = 541

EMPLOYEES PROVIDENT FUND (BALANCE OF THE 12%AMOUNT)=

780 - 541 = 239.

BESIDES THIS THE ADMINISTRATION CHARGES ON EPF AT 1.1% (A/C NO.2),INSURANCE FUND AT 0.5% (A/C NO.21) AND ADMINISTRATION CHARGES ON INSURANCE FUND AT 0.01%(A/C NO.22) ON THE TOTAL SALARY PAID DURING THE MONTH IS TO BE REMITTED ON OR BEFORE 15TH OF THE SUBSEQUENT MONTH.

tHANKS

P.RAMACHANDRAN

Hi All,
As per my knowledge PF is calculated on Basic salary and not gross salary. It is compulsory for employees earning Basic salary below Rs. 6500 and optional for employees havinf Basic salary over Rs. 6,500. Though we should insist all the employees to opt for PF.
And ESI is calculated on Gross salary. Employee earning below Rs. 10000/- per month are covered under it.
Please correct me if i am wrong.
Regards,
Reena

Dear reena,
You are right. but when the option for those drawing more than 6500 for pf, we should get a request letter from the employee for not to deduct pf since they are drawing more than Rs.6500
Thanks
p.ramachandran

Dear Reena,
Already explained the same..
ESI is contributed from both the sides Employee as well as Employer.
It is been calculated on the basis of Gross salary per month and the maximum ceiling is 10000 Rs./Month.
The contribution from both the sides is as below-
Employee Side- 1.75% of gross/month
So if gross of an employee is 8000/month then
ESI contribution would be 8000*1.75% = 140 Rupees
Employer side- 4.75% of gross/month
ESI contribution would be 8000* 4.75% = 380 Rupees.
Whereas, PF is also been paid from both the sides.. Both the employer as well as employee is required to pay the 12% of basic salary..
Out of this 12% of employer's contribution 8.33% goes to Pension fund whereas rest 3.67% goes to the PF Fund itself..
Regards,
Amit Seth.