Understanding the Latest ESI and PF Amendments: What's the New Ceiling Point?

Hi friends,

Can you tell me about the new amendment in ESI and PF? What is the ceiling point of ESI?

Hi,

I believe that until there is a change in the limit of PF and ESI, the following applies:
ESI Ceiling: 10,000 (Gross salary)
ESI contribution: 1.75% from the employee side and 4.75% from the employer side of the total salary.
EPF contribution: 12% from both sides or 12% from the employer side and a minimum of Rs. 780 from the employee side (12% of Rs. 6,500 basic salary).

As of now, there are no such notifications in AP. Does it vary from state to state?

Ram
L&T

Mr. Alone, what do you mean by minimum here? Is it right?

EPF contribution: 12% from both sides or 12% from the employer's side and a minimum of Rs. 780 from the employee's side (12% of Rs. 6500 basic salary).

The ESI limit is going to be hiked to 15,000 and PF to 12,000. For PF, the bill is about to be introduced in Parliament. Another important amendment that is going to happen in ESI is related to the workplace. Coming back from the workplace to home is also going to be counted as workplace. This means that if anything happens during the to and fro journey to the workplace and home, it will be treated as a workplace accident.

Dear Mr. Vikas,

As per the law, Rs. 780 or 12% of the basic salary, whichever is minimum, should be deducted from the salary as the EPF contribution from the employee side only.

Deepika (Ms. Alone)

Dear Praveen,

ESI limit has been raised to 15000 from 01 May 2010. Gazette notification has already been issued.

PF limit is currently at 6500 and will be raised to 12000.

Hi,

Ms. Alone, could you please confirm if 780/- is the maximum amount? If the amount exceeds this limit, will the PF not be deductible?

Ms Alone.

Pf can be deducted more than 780/- but its depends on employee that whether he does want to deduct his pf more than 780/- or not…& same is applicable for the employer that is he ready to submitted the same amount?.

But in that case calculation will be little bit changed..

The amount in family pension fund which is 8.33% can't be exeed more than Rs 541 and remain amount will be deposited in pf fund scheme which is 3.67 %

This type of deduction called by Voluntary Deduction.

Hi Deepika
(Ms Alone)
Pf can be deducted more than 780/- but its depends on employee that whether he does want to deduct his pf more than 780/- or not…& same is applicable for the employer that is he ready to submitted the same amount?.
But in that case calculation will be little bit changed..
The amount in family pension fund which is 8.33% can't be exeed more than Rs 541 and remain amount will be deposited in pf fund scheme which is 3.67 %
This type of deduction called by Voluntary Deduction.

Hi, Deepika.

The present upper limit for PF is Rs. 6,500. So, the 12 percent of Rs. 6,500 is Rs. 780. The employee pays Rs. 780, and the employer also puts in Rs. 780. Out of the contribution paid by the employer (out of Rs. 780), Rs. 541 goes to EPS, which is the pension scheme, and Rs. 239 goes to the individual's PF account.

Now, if your basic plus DA is more than Rs. 6,500, you cannot be forced to join EPF. Furthermore, you can increase your contribution, which means you can contribute more than 12 percent of your basic and DA, but the employer need not match that. It is up to the employer. If the employer matches the increased contribution, that amount minus Rs. 541 goes into your PF account.

Whereas your company has opted for a full 8.33 percent contribution to EPS, out of the contribution given by the employer, the full 8.33 percent will be credited to the EPS. For example, if your basic plus DA is Rs. 10,000, your contribution is Rs. 1,200 and the employer's contribution is Rs. 1,200. Out of the employer's Rs. 1,200, an amount of Rs. 833 will be credited to the EPS account, and the rest to your PF account.

In this case, when you retire, your average salary of the last 10 months will be taken into account for calculating your PF pension. Whereas, where the limit is Rs. 6,500, your last salary is considered only Rs. 6,500, even if your total salary when you retire is Rs. 100,000.

Please tell me about the ESI & PF contribution and new amendments in the limit. Also, how many employees are compulsory for mandatory registration in ESI & PF?

Hi, I have just received news that in the latest PF amendment (May 2012), PF deduction is from the gross salary (including HRA, medical allowance, travel allowance, special allowance) instead of basic salary + DA. Our company is practicing the same (on gross salary). Could you provide insight into the actual scenario of the PF issue?

Regards,
Divyesh Patel