Understanding PF and ESI Deductions: What Expenses Should Employers Consider?

Query on Provident Fund and ESI Deductions

What are the heads of expenses on which the employer has to deduct Provident Fund (PF) and Employee State Insurance (ESI)? Please provide a detailed list of all the expenses on which Provident Fund and ESI should be deducted. It is very urgent; please reply to the query as soon as possible.

Hi Sneha, please find enclosed the Excel sheet that provides a brief overview of both ESI and PF.

Regards.

Thank you, Jeevarathnam Sir, for providing the formulas. I want to know the head of expenses on which PF and ESI should be deducted. In other words, on whose salary and for which payments should ESI and PF be deducted?

Hi Sneha, even that's there, right?

Provident Fund (PF) Contributions

PF: 12% on the basic salary of both the employee and employer. Other than that, there are additional charges: 1.1% as admin charges from the employer (ER), 0.5% as EDLI charges from ER, and 0.01% as EDLI admin charges from ER.

Employee State Insurance (ESI) Contributions

ESI: Employee contributes 1.75% on gross salary, while the employer contributes 4.75% on gross salary.