New to Payroll? How Do You Calculate PF, ESI, and Basic Salary?

I am new to this field. Please help me understand how to calculate PF, ESI, and basic salary.

Thank you.

I never calculate the deductions, but I could help you a little bit.

PF Calculation

PF: 12% of basic salary (depends on attendance)

ESI Calculation

ESI: 1.75% of gross

Gratuity Calculation

Gratuity: 4.81% of basic

Dear seniors, I am new in this field. Please help me understand how to calculate PF, ESI, and basic salary.

Calculating Basic Salary

First, you have to calculate the Basic Salary, which is approximately 50% of the CTC.

Calculating PF

PF is calculated based on the Basic Salary as follows:
- 12% for Employee Share for PF
- 8.33% for Employee Share as Family Pension Fund
- 3.67% for Employer Share for EPF

Calculating ESIC

ESIC is calculated on the Gross Salary up to ₹15,000/- per month (maximum) as below:
- 1.75% for Employee Share on the Gross Salary
- 4.75% for Employer Share on the Gross Salary

I hope this information helps you.

Regards, Satyam

Complete Salary Sheet Overview

Find here the complete sheet of salary you require. It includes salary, overtime, deductions, PF, ESIC, Professional Tax (Gujarat slab), TDS, and net salary.

Regards.

Please find attached the complete salary calculations in an Excel sheet. Kindly review the attachment as it may assist you.

Thanks & Regards,
Harish Kumar K.S
Mob: [Phone Number Removed For Privacy Reasons]

Hi everybody, PF is always deducted on basic + D.A. at 12% for employees (P.F.) and 13.61% for employers, which includes 3.67% (P.F.), 1.1% admin charges, 8.33% pension scheme, 0.5% E.D.L.I., and 0.01% inspection charges. ESIC is applicable on gross expenses, including washing and conveyance allowances. For employees earning less than 15,000 INR per month, the employer contributes 1.75% while the employee contributes 4.75%. The basic pay should always be more than the minimum wages set by the state. Tax is deducted on the financial year earnings, and companies can choose to deduct it either once or monthly.

Regards

Well, I do not have any valuable inputs to share regarding the sender's issue, but I wish to put forth one matter which I hope would be worth sharing. You are free to support or criticize this opinion; I really do not mind.

Maintaining Decency and Courtesy

No one in this world is perfect. The sender here may be weak in English vocabulary and may also need to touch upon the basics of HR and other aspects, but I think it is not fair to give such advice (especially by making fun) on this platform. It can be replied to through a private message too. Perhaps the sender might have joined CiteHR mainly to start from the basics or learn many other things. All of us are here to share and gain knowledge, right? So why not maintain decency and courtesy while posting on a discussion? I am sorry I should not be saying all these here at such a great length, but I felt it is necessary to be shared here.

Anyways, as far as the Basic salary, ESI, and PF matters that are discussed here are extremely useful. Thanks a lot for the valuable contribution. 

Government Laws on Salary Breakdown

Are there any government laws that specify the percentage of total gross salary for Basic, HRA, LTA, etc.? I mean, would I be breaking any laws if I have Basic+DA as 30% of Gross? (Obviously, this 30% would need to conform to the Minimum Wages Act).

Say I have a breakdown as follows (All percentages of Gross Salary):
- Basic - 30%
- Conveyance - 10%
- Medical reimbursement - 10%
- Children's education allowance - 2%
- Leave travel allowance - 5%
- House rent allowance - 25%
- Attire allowance - 3%
- Special allowance - 15%

Does this fit within the "Law"?

Regards,
AJOSHI

Hi all, I wanted to know how to calculate tax on the following. We have divided the employees into two categories: Consultants and PF.

Consultants

Consultants are the employees earning below 15,000, and we deduct only 10.33% of their salary every month. They don't have PF and PT.

PF Calculation

For PF, it applies to people earning above 15,000, and we calculate as follows:
- Basic (40% of GS)
- DA (20% of basic)
- HRA ((Basic + DA) * 40%)
- Medical Allowance 1,250
- Conveyance 800
- Special Allowance

We have fixed deductions for PF at 780 and PT at 200.

Does this affect tax calculation, and is it correct?

Thank you.

I am new to CiteHR. Can anyone provide me with the details of salary breakup for someone working in a school according to the Uttar Pradesh government norms?

Regards,
Bijumon

Hi all, I am inquiring about how to prepare a monthly salary sheet. Could you please provide me with the formula sheet?

Regards,
Shivananda VD

I am new in HR. Please tell me where the HR training center is in Chandigarh which provides all types of training related to ESI, EPF, and payroll practically.

Regards,
Gaurav Mehta

Basic salary means Basic + DA, which we have to pay as per the Minimum Wages Act applicable to our industry and state.

House Rent Allowance (HRA)

HRA is 5% on Basic + DA as per the Maharashtra House Rent Act, and other states follow their guidelines.

Provident Fund (PF) Contribution

You have to pay a minimum of Rs. 780 towards PF if you are paying any allowances on payroll. If you are paying less than Rs. 780 to PF and you are paying some amount through allowances via payroll, it will attract the PF. To know more, please take our help to regularize your payroll.

Retainership Engagement

Secondly, how can a person be on retainership for less than Rs. 15,000? We engage consultants on retainership who are qualified and specialized in their field. Therefore, please look into this. We cannot engage peons or computer operators as consultants.

Please contact me if you need help and to avoid future mishaps. We work on a tailor-made package.

Regards,
Shailesh Sawant
[Phone Number Removed For Privacy Reasons]

Greetings to everyone! I am a fresher. Could you all do me a favor? How do I process payroll? What are the components of a salary slip, with examples and calculations? I am expecting favorable responses. Thanks to all in advance.

Regards,
Gowri Shankar J.

PF is calculated at 12% of the basic salary. ESI is calculated at 1.75% of the basic salary. I think this information will be helpful to you.

Regards,
Ashok Vardhan Koka

Please provide the method to calculate ESI and PF. If there are any formulae or methods available, kindly share them. Thank you.

Hi All,

I have a doubt regarding the PF amount in the CTC of a person who is earning 2 lakh per annum. Can anybody explain how to calculate it?

With regards,
Siba

Is ESI deduction applicable under a gross salary of 21000/- per month instead of 15000/-?

Hi Everyone,

I need to know about gratuity calculation in the simplest way. Is there any specific criteria applicable to its calculation? I have gone through many links, but I am still unclear about the concept. I have never done gratuity calculation in my professional career so far. I want to know exactly how we calculate it.

Thanks

Hi,

I received an offer letter from the IT company stating that there will be a training allowance of 15k for 3 months, followed by a monthly salary of 30k. Could you please inform me about the net salary per month after deductions for PF, ESI, gratuity, and bonus? I would appreciate detailed calculations.

Thank you.