New to HR? Seeking Help to Understand PF and ESIC Deductions Better

Respected Seniors, I am an HR Executive in a Pvt Ltd company, and this is my first job in HR. I lack practical knowledge about PF and ESIC. I am aware of the deduction percentages, but I desire to gain a comprehensive understanding of both deductions. Kindly assist me in resolving this issue.

Understanding ESI Contributions

ESI is contributed from both sides, by the employee as well as the employer. It is calculated based on the gross salary per month, with a maximum ceiling of 15,000 Rs. per month. The contributions from both sides are as follows:

- **Employee Side** - 1.75% of gross/month
So, if the gross salary of an employee is 8,000/month, the ESI contribution would be 8,000 * 1.75% = 140 Rupees.

- **Employer Side** - 4.75% of gross/month
The ESI contribution would be 8,000 * 4.75% = 380 Rupees.

Understanding PF Contributions

Additionally, PF is also paid from both sides. Both the employer and the employee are required to contribute 12% of the basic salary. Out of this 12%, the employer's contribution involves 8.33% for the Pension fund, while the remaining 3.67% goes to the PF Fund itself.

Regards,

PF:
Account
A/C 1 (PF) - 12% (Employee's Share) + 3.67% + Amt. > 541 (Employer's Share)
A/C 2 (Admin Charges for PF) - 1.10% (Employer's Share)
A/C 10 (Pension Fund) - 8.33% Limit 541 (Employer's Share)
A/C 21 (EDLI) - 0.5% (Employer's Share)
A/C 22 (Admin Charges for EDLI) - 0.01% (Employer's Share)

Total Contribution is 12% Employee's + 13.61% Employer's = 25.61%

ESI:
1.75% (Employee's Share)
4.75% (Employer's Share)

** Employees in receipt of a daily average wage up to Rs.100/- are exempted from payment of contribution. Employers will, however, contribute their own share in respect of these employees.