Understanding PF and ESIC Contributions: How Much Do Employers and Employees Pay?

sugandh0511
Can anyone please tell me what is the percentage of contribution of PF by the employer and employee, and what are the EDLI and admin charges? The PF is charged only on basic and DA. Also, please tell me the calculation of ESIC and at what percentage ESIC is charged.

Thanks and regards,

Sugandh
[Phone Number Removed For Privacy Reasons]
Vareena
Rates of Contribution:

a) The Employees' Provident Fund Scheme

In respect of establishments employing 20 or more persons and engaged in industries notified under Section 6 of the Act (other than establishments declared as sick), 12% of the basic pay, DA, cash value of food concession, and retaining allowance, if any, is subject to a maximum of Rs. 6500/- per month. Voluntary higher contributions are also acceptable at the joint request of the member and the employer.

b) The Employees' Pension Scheme

From and out of the employer's share of Provident Fund contributions, 8.33% of the total wages limited to Rs. 6500/- per month is segregated and credited to the Employees' Pension Fund in A/C No. 10 (w.e.f. 1-06-2001). The Central Government also contributes at the rate of 1.16% of total wages.

c) Employees' Deposit Linked Insurance Scheme:

No amount is recovered from the employee's wages. The employer should pay 0.5% of total wages subject to a ceiling of Rs. 6500/- per month (w.e.f. 1-06-2001).

d) What is the voluntary rate of Provident Fund contribution by the member?

As per the Act, the member has to contribute at the rate of 12% of his basic pay, DA, and retaining allowance if any. In case the member wants to contribute more than this, voluntarily he can do so at any rate he desires, i.e., up to 100% of basic and DA. But the employer is not bound to contribute at the enhanced rate.

Like most social security schemes worldwide, the ESI scheme is a self-financing health insurance scheme. Contributions are raised from covered employees and their employers as a fixed percentage of wages. As of now, covered employees contribute 1.75% of the wages, whereas employers contribute 4.75% of the wages, payable to the insured persons. Employers earning less than Rs. 40 a day as a daily wage are exempted from payment of their share of contribution. The state government, as per the provision of the act, contributes 1/8 of the expenditure on medical benefits within a per capita ceiling of Rs. 600 per insured person per annum. Any additional expenditure incurred by the state government, over and above the ceiling, and not falling within the shareable pool, is borne by the state governments concerned.

The contribution is deposited by the employer in cash or by cheque at the designated branches of some nationalized banks. The responsibility for payment of all contributions is that of the employer with a right to deduct the employee's share of contribution from the employee's wages relating to the period in respect of which the contribution is payable.
madhusvarma
Provident Fund (PF) Contribution

- Employer: 12% on Basic + DA
- Employee: 12% on Basic + DA
- EDLI: 0.5%
- Admin Charges: 1.10% towards Provident Fund and 0.01% for EDLI

Employee State Insurance (ESI) Contribution

- Employer: 4.75%
- Employee: 1.75%

Regards,
Madhusvarma
amirtha12varshini
Provident Fund

The person drawing a wage up to $6,500 per month is eligible for PF. The PF is calculated based on basic + D.A (dearness allowance). Here you have to note one thing: $6,500 is eligible only for normal people, up to $25,000 for physically challenged individuals.

- Employees' contribution: 12%
- Employer's contribution: 13.61%

Three accounts are involved in the calculation of PF:
1. EPF - The Employees' Provident Fund Scheme
2. EPS - The Employees' Pension Scheme
3. EDLI - Employees' Deposit Linked Insurance Scheme

For the calculation of EPF, 12% of the employee's contribution is added, and 3.67% is added from the employer's contribution.

For the calculation of EPS, 8.33% will go towards the pension from the employer's contribution.

For EDLI, 1.61% from the employer's contribution, 1.1% admin charges for EPS and EPF, 0.5% EDLI premium, and 0.01% admin charges for EDLI.

ESI: Employee State Insurance

- Employer contribution: 4.75%
- Employee contribution: 1.75%

For more details, visit the website: http://www.epfindia.com
ESIC Home Page: http://esic.nic.in
Renold Edwin
PF employee contribution is 12% of the basic salary. PF employer contribution is 13.36% of the basic salary. Out of this 13.36%, the split is as follows: EPF - 3.67% of basic salary, EPS - 8.33% of basic salary, admin charge - 0.85% of basic salary, EDLI admin charge - 0.01% of basic salary, EDLI (Employee Deposit Linked Insurance) - 0.5% of basic salary.

The maximum EPF contribution from the employee side is ₹1800 (15000 * 12 / 100 = ₹1800).

ESI employee contribution is 1.75% of gross salary. ESI employer contribution is 4.75% of gross salary. ESI is eligible if the gross salary is at or below 15K.

I hope that the information from my side is somewhat useful.
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