Struggling with Payroll Calculations? Need Help with Salary, PF, and ESI Details!

Good evening everyone, I am working as an HR executive in a staffing company. Can anybody help me with how to calculate salary, and how PF and ESI are calculated? Please provide me with examples so that I can prepare salary slips for my company.

The process and format that you develop for your company will depend upon the organization's policies. The process needs to be designed to manage the volume. Please do share your queries as you work along in this project. Please write to the experts here in this community to confirm the design and the components before you go live with it. You may learn from the documents and discussions shared below:

- [Payroll muster](https://www.citehr.com/246041-muster-roll-cum-sal-register.html#post1105430)
- [Payroll format](https://www.citehr.com/250488-payroll-format.html#post1123632)
- [PF-ESI calculation sheet](https://www.citehr.com/215099-pf-esi-professional-charges.html)
- [Payroll process dashboard](https://www.citehr.com/267533-10-learning-point-about-payroll-2.html#post1200286)
- [Excel sheet](https://www.citehr.com/218611-how-get-calculated-sal-formula-linked-attendence-sheet.html#post984504)

Regards,
(Cite Contribution)

Thank you, everyone, for replying. As I am in a small company, we don't have any salary structure. Please help me understand how PF and ESI percentages are calculated, how gross salary and net salary are calculated, and I need to know the salary breakup.

Dear Sonali,

Guideline for Preparing a Salary Slip

As a guideline, I can tell you how to prepare a salary slip. It varies from company to company based on their policies. You may use the following formula for salary calculation:

Salary = Basic + D.A. + H.R.A (50% of basic for Metro / 40% of basic for Non-Metro) + Conveyance Allowance + Special Allowance + Metro Allowance / Site Allowance + L.T.A. + Performance Bonus (Variable) - PF - Superannuation - ESI - Professional Tax.

The above is a mere guideline.

Calculation of PF

PF is deducted from the employee's salary at a rate of 12% of the basic. This deduction needs to be shown in the employee's salary slip. The employer also contributes the same 12% + 1.61% (Admin Charges) based on a basic pay of up to 6500. Out of this, 8.33% goes to EPS, and the rest 3.67% goes to the PF balance (i.e., 239).

ESI Calculation

Employee State Insurance is calculated at 1.75% of the gross salary for employees earning below Rs. 15000 per month, and the employer contributes 4.75% of the gross salary. The total 1.75% + 4.75% is remitted to the ESI Department.

Apart from this, you may include the different benefits that the company provides to employees.

Thanks & Regards,

Anupam Anurag.

For guidance on preparing HR payroll, you can refer to the attached document. It is a PowerPoint presentation that will assist you in preparing HR payroll for your company.

Regards,

Salary Calculation and Deductions

On basic, 12% PF, ESI - 4.75% & 1.75% on the gross. There is not any standard format for the salary slip.

Regards,