Understanding PF, ESIC, and Bonus: Are They Calculated on Gross or Net Salary?

Dear All,

I just want to get it clear that PF, ESIC, and Bonus calculations are done on gross or net salary and the logic behind it. For example, PF is 12% of the employee's contribution, and 12% is the employer's contribution in general. So, the 12% is of which? Is it the monthly net take-home pay or the monthly gross pay?

The same question applies to ESIC and bonus calculations. Furthermore, I want to clarify that the new limit for ESIC is now ₹15,000 per month. Is this limit based on the gross salary or the take-home salary amount? Lastly, I would like information on the slabs for professional tax deductions.

Thank you.

Dear Mahesh,

PF is calculated on Basic + DA, and ESIC is calculated on gross salary (except for the washing allowance). PTax is calculated on gross salary.

Regards,
Mahesh

Slab of professional tax in Gujarat is as follows:

0 to 2999 = 0 Rs of professional tax
3000 to 5999 = 20 Rs
6000 to 8999 = 80 Rs
9000 to 11999 = 150 Rs
12000 and above = 200 Rs

Regards,
Mahesh

The contributions towards EPF and ESI are payable on the gross amount, not on the net. The simple logic is "the amount payable or due," not the net or actually paid.

EPF at 12% is payable on the monthly gross amount of Basic + DA + (retaining allowance + value of food concession if any). ESI is payable on all monthly gross remuneration payable in cash to an employee, except washing allowance and some other special allowances paid to defray any special expense incurred by him, depending on his nature of employment. The rate is 1.75% & 4.75% for the employee's and employer's contributions.

Bonus is also calculated on the gross basic and DA.

ESI limit w.e.f. 1/5/10 is Rs. 15,000/- per month. Contributions are as explained above.

Hello!

I want to know details about ESI, including all statutory formalities related to this ESI. I expect help from you. Can you please do so?

Regards, S. Shankar 09833961172

Hi, friend, PF is detected at 12% on (basic + d.p. + d.a.) employees' contribution & the same contribution of the employer, up to 6500/- p.m. Salaried employees PF deduction is compulsory with a minimum 12% deduction. Above that depends on employees; he can deduct more amount for PF from his salary, but the employer's contribution is fixed.

Regards, Mr. Mahendra

Dear All,

I just want to get it clear that PF, ESIC, and Bonus calculations are done on gross or net salary and the logic behind it. Like PF is 12% of the employee's contribution and 12% of the employer's contribution in general, so the 12% is of which? Is it the monthly net take-home or monthly gross? The same is with ESIC and bonus. Also, I want to know that the new limit of ESIC is now ₹15,000 per month, so is it also gross or take-home salary amount? And lastly, the slabs for Professional Tax deduction.

PF Calculation

PF is calculated on BASIC + GRADE PAY + D.A. of 12% of the monthly salary of the employee, and the contribution of the employer is either 12% of ₹6,500 or 12% of above, whichever is less.

Regards,
Mahendra12

PF Calculation Details

PF is calculated on BASIC + GRADE PAY + D.A. at 12% of the monthly salary of the employee. The employer's contribution is either 12% of ₹6,500 or 12% of the amount above that, whichever is lower.

Reference: https://www.citehr.com/276883-pf-esi...#ixzz2exaKt6IO