How Does a Salary Cut Affect PF and ESI Contributions? Seeking Clarification on Pay Deductions

Friends,

Please clarify my doubt.

1. Due to the loss of pay when there is a salary reduction, should the PF and ESI contributions be reduced accordingly?

2. When there is a loss of pay, where do these reductions reflect? Only in Basic and DA? Or should it be equally deducted from all salary components (Basic, DA, HRA, Allowances, Incentives, etc.) with an equal proportion?

Waiting for your replies.

Regards,
Shijit.

Hi Shijit,

Yes, PF will be reduced accordingly if there are any LOP's. I'm not sure of the second question, however, let me check with our accounts manager.

Hi Shijit,

1. Yes, PF will reduce accordingly as Chaitra said.
2. You need to reduce the number of LOP on gross salary, so automatically it will reflect in all salary components.