Understanding PF and ESI Deductions: What's the Maximum Amount Allowed?

Hi,

I want to know how much the maximum amount we can deduct from PF and FSI.

Thanks & Regards,

Dilip

Hi Sharda,

For PF, the maximum limit is 780/- as the Basic ceiling is less than or equal to 6500. Therefore, 12% of 6500 (max limit) = 780/- for both employees and the employer.

In the case of ESI, the wage ceiling is Rs. 10000. So, the maximum limit for ESI = 1.75% of 10000, which equals Rs. 175/- from the employee's contribution, and the employer's contribution is 4.75% of 10000 = Rs. 475.

Hope your query is clear.

Regards,
Rachna Sinha
Hyderabad

Hi Dilip,

The PF deduction is 12% on Basic+DA. Presently, there is a prescribed limit for PF pay, which is Rs. 6,500/=. In that case, you have to deduct Rs. 780/=. Alternatively, if your employer agrees to PF deduction on the Pay (Basic+DA) exceeding Rs. 6,500/=, you may deduct accordingly.

Regarding ESI deduction, it is on Gross pay at 1.75%. The prescribed limit for the same is equal to or less than Rs. 10,000/=.

Regards,
H.R. Shah

If the salary is increased in between wage periods, like from May 2007 to 12000/-, and the employee's salary was 8000/- from April 2007, how much must we deduct from the employee? Should it be for 10,000/- or for 12,000/- till September 2007? Can anybody please clarify this?

Thanks to Surya-Mukherjee for the correct answer. I am following the same rule that even if the salary is increased in between the contribution period and even if it is more than 10,000/-, i.e., 12,000/- till September of the contribution, we must recover ESI contribution on 12,000/-

However, in the posts by Richrachna on 3/8/07 and hrshah on 14/8/07, it is mentioned that the maximum limit for ESI recovery is 10,000/- and the contribution on 10,000/- is Rs. 175/-, which is a little confusing. Any other senior member may give their view on this, please.

I am a new member, and I am very thankful for the senior members for their valuable insights on many subjects.