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.
Employees have to fill up a declaration form FORM 1, written clearly Male or Female. All the declaration forms should be counter signed by the employer.
Then prepare a return of declaration in form 3 separate for Male & Female within 10 days of filling of declaration form.
Then every employee shall be alloted an temporary identification number.
Whereas, PF is contributed @ 12% of basic salary from both the sides employee as well as employer.. Out of this 12+12 = 24%, 8.33% goes to Pension Fund and rest 15.67% goes to Provident Fund ..
The ceiling for being a member of Provident Fund is 6500/- basic per month. Even one may remain a member after crossing this ceiling amount, but the amount of contribution would remain same @ 12 % of 6500/- basic only..
In Some cases.. it remain contributed on more than ceiling amount also but it requires the approval from the employer..
Hope it must have helped you to get it understand..
4th August 2007 From India, Ahmadabad
5th August 2007 From India, Pune
i am Dinesh and i am working in nagpur with a real estate company . when i joined there were only few people in company now we have reached no of 20 so company is charging PF FROM OUR SALARY inishiaky we were given the CCA now company is making us to pay for both contribution of employee and employer now that is a big problem for i dont want to get a PF a/c but company wants me to do so ,, Sir please let me know how can i avoid this PF any other means to stop or disagree for this PF a/c because i am planning to construct my house on plot i purchesed last year and i want loan on it but this PF is disbalancing mine estimated planing
please help me out sir
Thanks and regrads
17th October 2012 From India, Mumbai