Curious About Payroll? Let's Dive into PF, ESI, PT, and Allowance Calculations Together

Hello Friends, I am specifically interested in understanding the percentage calculations for PF, ESI, PT, and allowances in the payroll process. I am eager to deepen my knowledge of how payroll is calculated. I kindly request your assistance in learning more about this topic.

Best Regards,
Kavitha

PF and ESI Calculations

PF: 12% on Basic Wages
ESI: 1.75% on Gross Pay

LTA and Bonus Details

LTA: 4.81% or as per organizational policy
Bonus: 12% to 20%

Be aware of your company's compensation policy and the pay structure to process payroll. You should also have a little bit of knowledge of leave administration as well as your company's attendance policy to process error-free payroll.

Deductions:

- Provident Fund: Employees' contribution is 12% of Basic Salary and 13.61% from the Employer.
- ESI: Employees' contribution is 1.75% of the gross salary and 4.75% from the employer.
- Professional Tax: It does not have a percentage-wise calculation but follows a slab rate system. It varies from state to state in India. You can refer to the professional tax calculation slab for Andhra Pradesh. PT is deducted based on the gross salary.
- Below 5,000/-: Nil
- 5,001 to 6,000/-: 60/-
- 6,001 to 10,000/-: 80/-
- 10,001 to 15,000/-: 100/-
- 15,001 to 20,000/-: 150/-
- 20,001 & above: 200/-

Thank you.

PF Contribution is 12%.

ESI is 1.75% (ceiling limit ₹15,000).

P.Tax is ₹150 and ₹200.

Regards,
Rangarajan

Hi Kavitha, as per my knowledge, payroll calculations differ in terms of percentages that we calculate. For PF, it is 12% from the employee's side (on basic + DA). ESI is calculated on the gross salary at a rate of 1.75% from the employee's side. When it comes to PT slabs, they vary significantly based on the gross salary. The maximum slabs are 60, 80, 100, 120, and 200 for those earning above 20,000 in salary.

Thanks for interacting with you.

Regards.

ESI Deduction

ESI Deduction is 1.75% from the Employee Contribution of Earned Salary up to ₹15,000. If it exceeds more than ₹15,000, you should take ₹263 only. If the fixed salary is ₹14,000 and an additional ₹2,000 is earned from OT, the salary will become ₹16,000. However, you should deduct only 1.75% for ₹15,000. For the same amount, the Employer Contribution should be 4.75% and paid to the ESI A/C.

PF Contribution

PF is 12% on Basic from both the Employee and Employer sides.

PT Slab Rate

The PT Slab rate will be ₹150 from ₹10,000 to ₹15,000, and ₹200 above ₹15,000. However, this will not be applicable to Delhi.

Thanks & regards,
Somashekar
HR Executive
Mob [Phone Number Removed For Privacy Reasons]

I am VP Kaushik, an MBA-HR fresher. I am new here. I would like to learn more about the payroll process, how it is calculated, related forms and laws, and the calculation format in MS Excel.

Regards,
VP Kaushik

Current PT Slab

Income Monthly Professional Tax

- Less than Rs. 2500: Nil
- Between Rs. 2500-3500: Rs. 60
- Between Rs. 3500-5000: Rs. 120
- Between Rs. 5000-10000: Rs. 175
- Beyond Rs. 10000: Rs. 200

As per my knowledge, PF is calculated at 12% from the employee's side. PF - 3.67% + EPS - 8.33% + EDLI - 0.5% + EPF admin charge (in case not having trust) + EDLIS admin charges - 0.01%. This is generally calculated on Basic + DA, but some organizations calculate it on the actual basic pay.

Thank you.

Regards

Hi, I am Anil Kumar. Can you suggest the best comprehensive Indian payroll course book or channel?