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.

Dear Sonali,

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)

Dear sir,

Please clarify the topic of Payments of Gratuity for me. I am currently working in the same organization under a different director. Initially, I worked for 2 years in company X and then transferred to another company where I worked for 1.5 years. Subsequently, I transferred back to the first company, making my total service period 6 years. However, the present Factory management is refusing to make the gratuity payment, claiming that I have not completed 5 years of service. I kindly request your guidance on how to receive the gratuity amount as the company management has halted the payment.

Additionally, I am curious if there are any rules and regulations regarding this situation, especially considering that both companies have the same owners but different names.

I would greatly appreciate any valuable advice you can provide. Please reach out to me at bisht_vikram2003@yahoo.com. I am eagerly awaiting your reply and suggestions.

Thanks and regards,
Vikram Singh

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,

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.

Now, on the 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: 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,