Minimum Wage (Basic +HRA) - Pf And Esi
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Minimum Wage (Basic +HRA) - Pf And Esi

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.

nancy_anu1 - Member Since: Aug 2010
Please help me regarding this as I am new to pay structure calculation. Is there any book which I can read.

rashmi_sbs - Member Since: Jun 2008
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

harry20819 - Member Since: May 2008
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

vivek_hr - Member Since: Jan 2008
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.

nancy_anu1 - Member Since: Aug 2010
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.

umesh111 - Member Since: Jul 2010
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.

Regards

Umesh Bhardwaj

mrnsarma - Member Since: Dec 2009
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

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

Take Home PAY 5184

Best Regards

neeruraghav2007 - Member Since: May 2007
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.

Regards/NR

Quote:
Originally Posted by nancy_anu1 View Post
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.

naresh_khola_78 - Member Since: Apr 2009
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



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