PF & ESI - Pf Esic [Thread 35408]

Does the gross salary normally include the employer's contribution to PF (12%) and the employer's contribution to ESI (4.75%) scheme?

The gross salary includes employee's contribution to PF but excludes the ESI bit of it.

Hi Ajay,
If I have got it clear, the gross salary of an employee includes Pf & esi share of employee as well.
For e.g.
if my gross salary is 8000 :
Basic Pay 3600.00
HRA 1800.00
Food Allowance 450.00
Conveyance 800.00
Medical Reimbursement 1250.00
Books & Periodicals 100.00
then the gross salary = net salary + pf amount deducted + esi amount deducted. Other deductions can also be taken into account depending upon company policy.
8000=7428+(432+140)
Hope I have made my self clear.
Regards,
Sashmita

Hi
i think the question has been a little misinterpreted. The question was about employer's contribution and not employee. In my opinion it is company specific. Our company includes both employee and employer contribution as a part of the gross salary. Some organisations keep it out. There is no thumb rule for the same in my opinion.
Regards
Avneet

The gross salary includes both PF and ESI contributions of the employer by definition and practice.
Rahul Kumar

Hi Rahul
We do not include ESI as a part of the CTCoffered and we also term it as Gross Salary. Although i agree that by definition it should include both but the dimensions of this definition could be company specific.
Regards
Avneet

hi,
Gross salary doesn't include pf & ESI employer contribution. For CTC calculation PF & ESI employer contribution is included.
thanks
vaitheeswaran

It is illegal to deduct employer's part of contribution to PF & ESI frm the gross salary. If this thing is happening in your company then you people will be in big trouble.
Regards
Abhi

I think U have misinterpreted it.
U are doing an illegal thing only if u are dudcting more that 12% of the basic+da component of the salary as PF.
When one says ure salary will be 240,000 per anum, it obviously means that this amt includes basic+da+hra+pf.
Instead of paying the PF to the employee, it gets deposited with the PF authorities which he will get after he retires. Thats all.