PF, ESI And Challan

Hi,
I'm new to HR field and my query is how to calculate PF , ESI. How much is the contribution of employee and employer in PF and ESI both. Is it calculated on the monthly basis, quaterly or yearly.
Thanks
Sumit

Dear Sumit,

Just a basic for you on the topic

PF

PF has two contribution.

Employee contribution : 12% of Basic Salary.(12% goes to Employer Provident Fund(EPF) account)

Employer contribution : 12% of Basic Salary. (Here employer contribution 8.33% of 12% goes to pension fund and 3.67% of 12% to Employee provident fund(EPF).

PF will be calculated in Basic Salary(Basic+DA).

Must Applicable for 20 or more person working in an establishment(Soon to become 10 members).

More than Rs. 6500 basic salary, employer has an option to contribute 12% of 6500(Rs.780) or actual 12% on basic salary.

Note: while remitting to EPFO department, Employee contribution will be 12% and Employer contribution is 13.61%. ( Here employer contribution - 12%, Admin Charges - 1.1%, EDLI Charges - 0.5%, EDLI admin charges - 0.01%)

ESIC

Employee contribution - 1.75% of Gross Salary.

Employer contribution - 4.75% of Gross Salary.

ESIC will be calculated in Gross Salary.

Must applicable for 10 or more employees in an establishment.

ESIC is applicable / contributed for employees getting salary upto Rs.15000/-(Gross salary). Rs.25000 in case of employees with disability.

Both PF & ESI should be calculated on actual earned basic and actual earned gross salary for the month respectively.

There are also many post by members in Cite HR on the same topic, you can have a detail explanation from that.

Hi Sumit,

Firstly let me congratulate you for being a part of HR community. I wish you all the luck for your future.

Wrt to your query PF & ESIC are monthly contributions. If you mention the state you reside in, it would help others to guide you properly.

1. PF

Employee's share is 12% on actual basic &

Employer's share is 12% on actual basic with upper limit of Rs. 6500/-

An example will make it clear and understandable:

Actual Basic earned for a month = Rs. 9000

For PF calculation

Employee share = 9000*12% = 1080/-

Employer share;

EPS = 6500*8.33% = 541.45/-

EPF = Employee Contri - EPS = 1080 - 541.45/- = 538.55/-

EDLL Charges = 6500*0.50% = 32.5/-

EDLL Admin charges = 6500*0.01% = 0.65/-

PF Admin Charges = 9000*1.1% = 99/-

At times, company also calculate PF on actual basic only, you can check with your employer.

2. ESIC

Employees with Gross salary <=15000/- are eligible for ESIC.

Employee's contribution = 1.75% of Actual Gross Salary

Employer's contribution = 4.75% of Actual Gross Salary

Hope this helps.

Regards,

Hiral