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Dear All,
I am working in a call centre. There is a high attrition rate. We pay pf and esi and the employee leaves the organisation. Want to know if an employee can be taken for 3 months on salary basis without pf & esi deduction. Please help.
From India, Mumbai
Dear Manjula,
No, you can't take them on salary basis without Pf or Esic,It is mandatory to employer to pay PF & Esic of each and every employees.Some employer not showing new employees on muster & also not deducting Esic, PF & P-Tax from their wages for two to three months.You can go for same,but this is wrong practice.
From India, Nasik
If you take them as trainees for three months on payment of stipend, you need not pay P.F contribution but you need to pay ESI contribution. B.saikumar Hr & labour Law advisor. mumbai
From India, Mumbai
In fact I want to modify my reply. Since the Standing orders Act is not applicable to you as youa re not an industrial establishment within the meaning of standing orders act, even if you appoint them as trainees, iam afraid, you can escape from liability even under P.F. The better option is to appoint them as apprentices under Apprentices Act 1961(if the Act icovers your establishment) since they are not covered both under P.F Act and ESI Act.
Hr & Labour Law advisor
From India, Mumbai
No you can't take any outside employees as an Apprentice,There are some Government ITI institute from whom you can take the candidates as a Apprentice for the said period and Within seven days from the date a trade apprentice joins an establishment, the employer shall prepare the return in form Apprenticeship – 4 in Schedule-III in duplicate and shall submit one return to the Regional Director or State Apprenticeship Adviser as the case may be, and the other to the Principal or Head of the Institute where Basic Training or Related Instructions shall be imparted.
But most probably Apprentice are taken in manufacturing unit for technical position for giving Basic Training or Practical Training.
From India, Nasik
You can make there Basic salary above 6500 so PF will not be eligible for them & you can make their gross salary above 15,000 p.m. then you need not pay for PF & ESIC
Hope it's of help.
Regards, Derek Gomes
From India, Nagpur
I totally agree with Ganesh Chavan regarding "Apprentice".
Good suggestion "You can make there Basic salary above 6500 so PF will not be eligible for them & you can make their gross salary above 15,000 p.m. then you need not pay for PF & ESIC".But you should pay the Admin Charges of both social Security Acts,
Their is no other Option available.
From India, Thana
Dear Gulanar, In my organization, Probation period for new employee is Six months,but company has right to extend it. It varies from company to Company.
From India, Nasik
hi all
1.pls let me know what are the forms we want to submit to pf office for claim
2.The procedure in detail and is there any restrictions to add the employees in pf
3.pls inform me the basic rules in pf
From India, Bangalore
can anyone guide me, our company is not paid PF & ESI contribution since last six months. now if we pay the same what is the penalty we have to bear.
From India, Bangalore
Hi all,
on behalf of my company iam promoting this query ...
How to apply and what are the formalities should a company do for the following:
1. Labor License Certificate
2. VAT & Sales Tax Registrations for supporting Hardware requirements.
3. Import Export License Registration
Plz Plz Plz let me know ASAP.....Very URGENT for me to know Plz.........
Thanks & Regards,
From India, Hyderabad
Hi Manjula,
I do agree with Ganesh about the 'Apprentice ITI institutes'.
Also PF will not be applicable incase Basic wage goes above Rs. 6, 500/- Also if their Gross salary is raised to above 15, 000/pm PF and ESIC is not applicable. However, not so sure if your existing salary matrix can adjust with any off shot hike for such recruits.
Anways wish you all the best!
From India, Madras
Hi Pratixa,

PF is deducted on Basic salary i.e Basic + DA is Rs. 6500/- or less above that PF is not deducted.

1) Employee – 12 % (of Basic + DA & Food concession allowance & retaining allowance, if any)

2) Employer – 13.61 % (of Basic + DA & Food concession allowance & retaining allowance, if any)

[ 13.61 % = 3.67 % PF + 8.33 % Pension Scheme + 1.10 % Admin. Charges of PF + 0.5 % EDLI + 0.01 % Admin Charges of EDLI ]

EDLI - Employee deposit link insurance


Here this PF is normally deducted from the basic & DA ( dearness allowance )

Such that Basic salary - 35%

DA - 15% outof gross salary.

For (e.g) - If the gross salary of a person is Rs.9000/-p.m

Basic- 35% @ 9000 - 3150

DA - 15% @ 9000 - 1350

Total -------



Such that the total amount would be deducted @ 12% (i.e) PF - 540/-

The maximum ceiling limit of PF - Rs.6500/-

If the basic + DA exceeds 6500/- than the contributions is optional. Some company may have their own company policies.

Provident fund is calculated towards the employers is 13.61%

1. Employers Contribution

2.EPF A/c No.1 - 3.67%

3.EPF - Admn Charges - 1.1%

4.Pension Fund A/c No.10 - 8.33%

5.EDLI A/c No.21 - 0.5%

6.EDLI - Admn Charges - 0.01%

ESIC calculation:


In this ESIC, it includes the medical benefit both for the employee and employer.

It has been calculated on the basic of gross pay per month and maximum limit is upto Rs.10000/- p.m

Employee side - 1.75% and Employer side - 4.75%.

So if the gross of an employee is 8000/- p.m his contribution would be 8000*1.75% = 140/-

Employer 8000*4.75% = 380/-

Therefore Net pay = Gross pay - Total deductions

1. Those who are getting 10000/- gross per month will not be applicable under ESIC act.

2. 20 eligible employees to get registered in ESIC

3. Eligible employees means those who are getting gross pay upto 10000/- or less per month.

Apart from that there is a tax deduction., it includes the Income & professional tax.

CTC means cost to the company.i.e .what are all the expenses incurred by the Company for any of its employee for a particular period(monthly/yearly)

gross pay + employers pf+employers ESI + bonus = CTC


I think this calculation will be helpfull to you.....


From India, Hyderabad

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