Confused About EDLI Charges? Need Help Understanding the Calculation Based on Salary Limits

Hi, please can anyone help with how to calculate EDLI charges? I know it is 0.5%, but I'm not sure whether it is calculated based on the employee's basic salary or a ceiling of Rs. 6500. Can someone confirm if the example below is correct?

If an employee has a basic salary of 10,000:
- Employee share 12% - 1,200
- Employer's 8.33% on 6,500 - 541
- Employer's 3.37% on 6,500 - 239
- EDLI 0.5% on 6,500 - 32
- Admin charges 1.1% on 10,000 - 110
- EDLI admin charges 0.01% on 6,500 - 1

Thanks in advance.

Your calculation is correct. The maximum contribution to EDLI is Rs. 32.50 only. However, many exempted companies calculate EDLI for the whole basic.

Regards,
S. Sethupathy, Erode.

Dear Sethupathy, thank you for your response. Can you please tell me the account headings for payment split in the challan? I have been informed to perform the following calculation: for example, if 5 employees have a basic salary of 10,000 each, then the totals should be as follows:

- Total A/C1: full basic wages - 50,000
- Total A/C10: ceiling basic - 32,500

Is this correct? Please clarify.

Thank you,
Thiru

EPF/EPS/EDLI Salary Calculation

The calculation should be:
- EPF/EPS/EDLI salary - Rs. 10,000
- A/c 1 (3.67% + 12%) - 659 + 1200 = 1859
- A/c 2 (1.1% of EPF salary) - 110
- A/c 10 (8.33% of EPS salary) - 541
- A/c 21 (0.5% of EPS/EDLI salary) - 50
- A/c 22 (0.01% of EDLI salary) - 2

Clarification on EPF Deductions

In EPF, the deductions bearing on employee salary should be 12% of the salary. The component considered for deduction should be (basic + DA + food conc. if any and any other special or undefined allowances).

The employer's share of contribution for 12% should be bifurcated in this way: 3.67% + 8.33%. The 3.67% should be the difference of 12% (employee share) - 8.33% (pension fund).

The ceiling for the calculation of 8.33% should be a maximum of Rs. 6500/-. The ceiling for EDLI calculation should also be the same, but in A/c, the minimum charge should be Rs. 2/- and the minimum charge should be Rs. 5 for A/c 2.

Hope this explanation clears all doubts regarding the calculation of EPF accumulations.

Thanks & regards,

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