nancy_anu1 Started The Discussion:
Hi ALL, I am working at a place (Delhi) where we are in the process of starting PF deductions and ESI benefit. The salary paid by employer is only Rs5500 p/m.
As an HR I want to divide salary into various components so that PF deduction is as less as possible as employees will get even lesser salary after PF deduction. Also PF and ESI(employee contribution) deduction is part of minimum wage or is above that.

Please help me making a new salary slip for my employees, I am confused with minimum wage, then Pf and ESI deduction out of Rs5500 as salaries are very low here.
Posted 17th August 2010 From India, Delhi

Please help me regarding this as I am new to pay structure calculation. Is there any book which I can read.
Posted 17th August 2010 From India, Delhi
Dear Nancy_Anu1, As far my knowledge is concerned we can’t divide the mini wages in into different component (Like HRA, Conv. etc). The PF & ESI is applicable on Rs. 5500 P.M. Regards Rashmi
Posted 17th August 2010 From India, Lucknow
hi nancy,

divide the salary into two part one Basic (minimum wages which is applicable in Delhi) & rest as other allowance, so that you will have a less impact on inhand salary of an employee.

Harpal Singh
Posted 18th August 2010 From India, Delhi
Dear nancy, keep the minimum wage (as applicable in that state) as Basic, so that PF diduction will be lesser, although this will not help in case of ESI, since it is diducted on Gross.
Posted 18th August 2010 From India, Karnal
Thanks to all of you for your reply. As suggested I ll be keeping Basic as rs5300 and rs200 as some allowance and no HR as salary given by employer is only rs5500. Also suggest that can we deduct employees share of PF from this rs5300 basic as well as gross.
Posted 18th August 2010 From India, Delhi
Dear Nancy,

You can deduct Employees share of contribution from there salary not only PF, ESI, you can also deduct fines, advance taken by employees from there salary, but it should not beyond the law.


Umesh Bhardwaj
Posted 19th August 2010 From India, Kanpur
Dear Nancy_Anu1

As per the regulations, you can't bring down the Basic Pay less than 40% of the Gross Pay for calculation of E.P.F. Rest 60% of the Gross Pay to be divide under the Heads of H.R.A, Transport, Medical, and any other allowances.

For example, the breakup of the CTC Pay Rs.5,500/- would be:

Basic 2200
HRA 880
Conveyance 800
Medical 1250
Special Allowance 106
E.P.F 264
C.T.C. Total 5500

E.P.F Contribution 264
Professional Tax 60
ESI 92
Others 0
Deductions Total 416

Take Home PAY 5184

Best Regards
Posted 19th August 2010 From India, Hyderabad
Dear Nancy

In Delhi Minimum wages has been increased in Feb 10 upto 6500/- as basic.
So employer has to cut PF on 6500/-

if you will give me interested take home pay for your employees then i will give eyou break up for ctc.


Posted 19th August 2010 From India, Panipat
as per discussion with E.O from PF we can devide minimum wage into basic & HRA only when the manpower is below 20 worker regds/naresh
Posted 19th August 2010 From India, Delhi


Found This Useful? +Vote Up This Via Google.  

Why Vote? User validation is extremely important for good content to prosper.
Disclaimer: This network and the advice provided in good faith by our members only facilitates as a direction towards the actions necessary. The advice should be validated by proper consultation with a certified professional. The network or the members providing advice cannot be held liable for any consequences, under any circumstances.

About Us - Advertise - Contact Us - RSS   On Google+  
Privacy Policy | Disclaimer | Terms Of Service
Facebook Page | Follow Us On Twitter | Linkedin Network