Understanding Salary Deductions: What Are the Real Percentages for PF, ESI, and Gratuity?

Could you please tell me in detail about the salary deductions for any type of employee? I am eager to know.

Regards,
Manikyam
Hyderabad

PF percentage is 12% of Basic.

ESI percentage is 1.75% of Gross.

Gratuity percentage is 4.81% of Basic.

Regards,
S.K. Sinha
Manager - HR

Salary deductions are somewhat different besides Provident Fund (PF), such as in the bank. The PF deduction is 10% of the basic salary. Tax Deducted at Source (TDS) depends upon the salary range. Additionally, there is the option to contribute to the Death Relief Fund (DRF) or opt for Group Insurance at ₹125 per month. The festival advance amount varies based on the basic salary and can be repaid in 10 monthly installments.

PF is 12% on Basic & DA, and the wage limit is ₹6500. ESI is 1.75% on Gross wages. The employer contribution is 4.75% of Gross Wages. Both PF & ESI are calculated on an attendance basis.

Regards,
Kavitha M.J

PF is 12% of Basic. ESI is 1.75% of Gross. Gratuity is 4.81% of Basic.

Regards,
Satya

Dear Manikyam, please find enclosed the PPT. It will help you understand the PF and ESIC.

Regards, Sanjeev

Hi Sanjeev,

Could you please elaborate on the Gratuity deduction (4.81%) as in our organization, gratuity is considered a benefit and not part of the CTC?

Regards,
Prerna

Dear Mr. Sinha, Could you please elaborate on how the Gratuity percentage is determined? I understand that it is a lump sum given at the end of employment upon resignation, death, or disablement after 5 years. Is it deducted monthly? What happens if an employee resigns after working for only 1 year? Would they still be provided with a gratuity amount?

Regards,
S.K. Sinha
Manager - HR

The ESI will be on ₹15,000/- gross salary only; anyone earning more than that will not be eligible for ESI.

Best regards,
Ganesh

Can we calculate gratuity as a percentage of salary? What percentage of salary constitutes gratuity?

Salary deductions typically include various components such as:

- PF: 12% of basic salary
- PT: As per the respective state government structure
- TDS: Deducted based on the salary range
- ESI: 1.75% of gross from the employee and 4.75% of gross from the employer
- LWF: Labour Welfare Fund (deducted once in six months)

Regards

What is the percentage of provident fund, HRA, wash, heat allowance? ESI percent and minimum date of working required for ESI and PF.

In the current company, gratuity is calculated as per the act, i.e., 4.81%. However, the new recruiter is calculating almost 8% of the basic as gratuity. Is it a good thing to consider?

In the current company, gratuity is calculated as per the act, i.e., 4.81%. However, the new recruiter is calculating almost 8% of the basic as gratuity. My basic salary has been reduced by almost 25k from the current one. So, are these things considered good? Should I accept the offer, and what points should be kept in mind while accepting the offer?

Good Afternoon Sir,

I want to know about the percentage of PF deducted from the monthly salary. Is it 12% or 12.30%? Please guide me because my organization (PSU) deducts only 10% of the basic salary (which is 6000).

Thank you.