Clarification on PF/EPS/ESI Calculation on Salary - leave encashment

G SHANKAR GANESH Started The Discussion:

Could anybody please confirm what is the amount to be calculated for PF, EPS & ESI i.e Whether we have to consider only the BASIC amount of th e Salary for calculation or any other Salary Head to be added to BASIC.

What is the minimum wage for calculating ESI

bhushan dahanukar -  Member Since: Jun 2007
Mr. Shankar Ganesh,

You need to learn more on PF & ESI.
PF Wages means Basic + DA+ Food subsidy+leave encashment(if paid). On PF wages, employee contribute 12% and employer also contributed 12%. The employer contribution splited into PF 3.67% and Pension 8.33%. The PF wages ceiling upto Rs.6500/-.
ESIC wages means basic+DA+allowances+overtime. But Conveyance should not considered. the ESI revised limit Rs.10,000/-. the employee contributed 1.75% and employer contributed 4.75% on total ESI wages.
The minimum wages also attract to ESI deduction.

Bhushan Dahanukar

preetikhorana -  Member Since: Jul 2005
Can you let me know whether Special Pay is included in the Wages as per the ESI Act? pls. revert back ASAP. thanks!!

srinivas.2500 -  Member Since: Oct 2007
Dear Mr. bhushan dahanukar,,PF Calculates is doing on Basic + DA only, No need to include leave encashment and food Food subsidy.Under ESI deduct on gross salary (gross salary means basic+DA+HRA+Convenience+Special Allowance) all components comeing under gross salary. you must deduct on gross salary.RegardsSrinivas B

Rajeev Verma -  Member Since: Apr 2008
I am attaching a file containing the details of ESI wages........ Just go through it........

Attached FilesProvided by community member Rajeev Verma. Join us to learn and grow with your peers.
File Type: doc ESI Wages.doc (61.5 KB, 2922 views)
swadha11 -  Member Since: Apr 2010
Hi, Please let me know if BONUS will be added to gross salary while calculating ESI and Profession TAx Awaiting for reply Thanks Swadha

sm.acharya -  Member Since: Jan 2008
Hi Friends,

Can anybody clarify my following queries:

1) How do calculate monthly salary of Rs.15000/- in case of daily rate wages, what is the rule applicable for absenteeism. For eg. if a person work 30/31 days in a month he will exceed the monthly salary of Rs.15000/- if he/she absent for even one day his salary will be below Rs.15000/-. In such case whether he/she is eligible for ESIC deduction or not.

2) A employee is de-covered from ESIC Coverage in the month of October-12 to January-13 as his salary was more than 15000/- but in the month Feb-13 he gets only 28 days salary which is less than 15000/-. What is the rules applicable as per ESIC Act.1948. Whether employee will be recovered for ESIC deduction or not?


Sudhakar M. Acharya

myhrsoft -  Member Since: Oct 2012
Dear Member

PF is calculated on the Basic salary(12% of Basic)

Minimum Wage for Calculation of ESI is 15000/- per month

For more information please call at + 91 9885578325(http:\\Human Resources | payroll | outsourcing | hr | software | Hyderabad | Information | Management | system | solutions)


Srikanth. V


sm.acharya -  Member Since: Jan 2008
Dear Friends,

My question is " for daily rated wage system" i.e.

1) How to treat absenteeism while calculating ESIC salary of Rs.15000/- for example Workman A worked for 31 days in Jan-13 and got a monthly salary of Rs.15500/- and workman B woked only 28 days he got a salary of Rs. 14000/- only. In such case the workman B is eligible for EISC Deduction. In my view he should be de-covered from ESIC as if he had woked for 31 days his salary would be Rs..15500/-

2) Similary in the month Feb-13 e.g. The workman A will get only 28 days salary i.e. Rs.14000/- which below Rs.15000/- whether this workman A is eligible for ESIC deductions?

Nothing has been mentioned in the Act. The act says the eligible salary per month for ESIC deduction is Rs.15000/-

Please clarify.


Sudhakar M. Acharya.

myhrsoft -  Member Since: Oct 2012
Dear Acharya

As per the ESI act if employee salary is 15000/- month he is eligible.

If the employee salary is 15000/- he is eligible for ESI .

ESI cycle would be period of six months if the employee falls in the category for the eligibility of ESI and if you increase his salary before this period he is still eligible for ESI ,After 6th month of the period he is not eligible

for more details please call at + 91 9885578325(http:\\Human Resources | payroll | outsourcing | hr | software | Hyderabad | Information | Management | system | solutions)

Regards, Srikanth. V


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