Insights on Statutory Deductions, Employee Benefits, and Taxation in Payroll Management

Hi all,

I have a query regarding the statutory deductions. We are deducting PF, ESI, and PT from the employee's salary according to their respective percentages. In this case, if an employee attended his duties for one day and is getting less than zero as net take home, what will be the process in this case? Should the employee bear these amounts?

Please give me your valuable suggestions.

Regards,
Vijay

If an employee attends only one day at the office, his salary will be limited to that one day's pay. The deduction will also be reduced proportionately. How can it be less than zero? Suppose the monthly salary of an employee is Rs. 6000, and he comes to the office just one day, the rest of the days being leave without pay. His gross salary for that month will be Rs. 200 (6000/30), from which PF @ 12% of Rs. 200, ESI @ 1.75% of Rs. 200, and PT as applicable (it is also based on the total income received by the employee) shall be deducted. The net amount is then paid to the employee. How can it be less than zero?

Regards,
Madhu.T.K

Profession Tax is a state subject and may vary from state to state. Normally, all earnings of the employee while working with an employer stationed at a particular locality are taxable under Profession Tax. Therefore, Profession Tax is taxable on the total salary earned by the employee.

Regards,
Madhu.T.K

Professional tax deduction slab-wise in Gujarat. Tax deduction on Gross Salary:

- Salary PT
- 0 to 3000: 0
- 3001 to 5999: 20
- 6000 to 8999: 80
- 9000 to 12000: 150
- 12000 and above: 200

If you have any confusion after reading this message, please email me at adminsv3@srsparivar.com.

Faruk Shaikh
HR/Admin Executive

Mr. Madhu is correct. PT, IT, etc., are statutory deductions that the employer has to make irrespective of the provisions of the Payment of Wages Act 1936. However, if one works only one day, their tax liability is limited to that extent only.

Dear members,

I need to know if in our organization, LTA, MEDICAL, and EX-GRATIA are the same as basic. Currently, I am receiving LTA and Medical benefits for 6 months after the employees' appraisal. For example, my calculation indicates that LTA Medical (before appraisal) is 6750 (LTA) and 6750 (Medical), with an Ex-gratia of 13500. After the appraisal, the new salary is as follows: LTA - 8500, Medical - 8500, Ex-gratia - 17000.

So, this time's LTA and Medical I have calculated by this method, i.e., 6750/12*6 + 8500/12*6 = 3375 + 4250. I understand this method, but what I need to know is how to calculate for 12 months and for the next 6 months... :confused:

Please help!!!!

Regards :)

Hi Vijay,

Regarding the deductions on PF & ESI, you may apply the statutory percentage for that employee. However, for PT, I need some details, i.e., your place of work (region) for the slab rate. Additionally, you may contact the local panchayat or the authority to which you are remitting the PT, as the rates vary from region to region. Some regions require monthly payments, while others are on a half-yearly basis. It is advisable to consult the panchayat or the concerned authority for guidance.

Regards,
R. Rathina Kumar

If an employee attends only one day at the office, his salary will be limited to that day's pay. The deductions will also be reduced proportionately, but it cannot be less than zero. For example, if the monthly salary of an employee is Rs. 6000 and he works for just one day with the rest of the days as leave without pay, his gross salary for that month will be Rs. 200 (6000/30). From this amount, PF at 12% of Rs. 200, ESI at 1.75% of Rs. 200, and PT as applicable (which is based on the total income received by the employee) will be deducted before the net amount is paid to the employee. It is not possible for this net amount to be less than zero.

Regards,
Madhu T.K

Dear Vijay,

I want to know the full form of PT. I have never heard about PT. Please tell me what PT stands for.

Thank you.

Hi all, I am Mahender Gupta from Faridabad, Haryana. I am confused about some provident fund policies. The government has made a rule that below 6 months of service, the employee is not eligible for the pension fund. However, the employer has paid both shares for their employees. Is this legal? I want to know under what rule they have made this amendment and where this fund goes. I also want to know if we can challenge this rule in civil court.