How Do You Calculate EPF/ESIC Days When Employees Work Part-Time in a Month?

I am a little bit confused about calculating the number of days for EPF/ESIC. Normally, we include all Sundays of a month in calculating EPF/ESIC. But what if somebody has worked for 13 days in a month and the month is of 31 days including 5 Sundays? Here, we will also include all Sundays, so the total working days of the employee will be taken as 13 + 5 = 18 days.

Or is there another way of calculating it?

I will explain my problem by example:

Example of December Calculation

Take the example of December. It contains 31 days, i.e., 26 + 5 (Sundays). In this scenario, if an employee has worked for 13 days, then what will be the total number of days for the calculation of PF?

So, the total days will be 13 + 5 (Sundays) = 18 days. Is there another way to calculate the total days of working?

Regards,
Preeti Shukla

Dear Preeti,

Understanding PF/ESI Calculation with Sundays

Sunday is considered mandatory. If an employee worked before or after Sunday, Sunday is also included in the calculation for PF/ESI. However, if an employee did not work on Saturday, Sunday, and Monday, making three days absent, Sunday cannot be counted.

Regards,
Preeti Shukla

Please ensure whether he/she is a confirmed employee or not.

Leave and PF Deduction Clarification

If I am a confirmed employee in my office and I have taken a 3-day leave, which includes Sunday as per your statement, but I have a sufficient balance of EL/CL, then my PF should not be deducted.

If I am in the probation period and I am not eligible for leave, then the company will make LWP deductions from my salary, and in that case, PF should be deducted.

Thank you.
Regards.

Discussion on Calculating PF or ESI

When considering the calculation of PF or ESI, we should be aware that employees are entitled to different types of leave such as Earned Leave (EL), Sick Leave (SL), and Casual Leave (CL). These leaves need to be factored in when calculating the salary. Therefore, I am requesting Preeti to provide us with full details so that we can give a justified answer.

Regards,

As per my knowledge, if the employee has taken leave for the first 13 days of the month and if 2 Sundays appear in those 13 days, then the 2 Sundays are considered as leave and the rest 3 Sundays have to be considered as Week Off.

For example, if he/she has taken a leave from Monday to Saturday, then both the Sundays (prior to Monday and after Saturday) are considered as Week Off. In case he/she has taken a leave from Monday to the next Monday, then the Sunday in-between the 2 Mondays is considered as leave.

Hope I have made it clear.

Regards,
Sheeba

Assuming your organization works 6 days a week and taking December 2012 as an example, please find my answer below.

Case 1
If an employee worked from 1st December 2012 to 15th December 2012 (13 working days), then you have to calculate only for 15 days.

Case 2
You need to provide the actual scenario of the case to provide the details. I mean, when did the employee work, and the days he/she has taken leave in December, and how the leave is accounted for in the system. Based on the clear case, we may be able to provide the right answer.

Thanks and Regards,
Srinivas Marnade

Consider only those days for which you are paying wages, including paid holidays.

Varghese Mathew

Methods for Calculating Salary in India

There are two popular methods in India for calculating salary:

• Total Month Days (with Sunday)

This means if the salary is 3000 PM, then the per day salary would be 3000/30 (month days) = 100 Rs per day.

Now, let's say 15 days are present. We should cover till the last day including present Sundays, which means we have to add 2 or 3 Sundays.

Present = 15, Sunday = 2, total days = 17 x 100 = 1700 Rs.

In this method, some rules also apply. If somebody is absent on Saturday and Monday, then that Sunday will not be included. It is not practical to check every employee's Sunday, especially when dealing with a large number of employees.

• Total Days (without Sunday) Method

I prefer this method. The Labor Department, ESIC, PF, leave encashment, and every department are also satisfied with this method.

In this method, if the salary is 3000 PM and the month's total days are 26, then the per day salary would be = 3000/26 = Rs 115.38.

Now, let's say there are 15 days present:

Present = 15

Any approved leave = 0

Any holiday = 0

Total days = 15

Gross salary is: 15 x 115.38 = 1730.00

If you compare this, as per method 1, the salary is 1700, and as per method 2, the salary is 1730. Why?

Because of Sunday. If you count 3 Sundays, the salary would be 1800.00. Every time, not every employee would be satisfied with the Sunday calculation.

That's why nowadays, big organizations are adopting method 2.

Simple and best. And approved by the Factory Act as well.

Thank you all for your replies.

Salary Calculation Method

Pawandarda: My company adopts the second method that you have mentioned. Unfortunately, here no holidays are given in a month. I am asking, considering the second method as the calculation of salary, if an employee has worked for 13 days (excluding Sundays) in a month, what will be the total number of days for PF calculation?

@Nirav, there are no holidays for employees in the company.

Regards,
Preeti

Simple Calculation of Salary and Deductions

Only the present days would be the total days, which means 13 days.

If your salary is 5000 and the total number of days in the month is 26, then 5000/26 = 192.30 per day salary.

Therefore, the gross salary would be: 13 x 192.30 = 2450.00, and the PF would be deducted on its basic salary.

Calculation of PF and ESI for 13 Days' Salary

If your company adopted the second method, then calculate PF and ESI on 13 days' salary.

For example:
- Total Salary: 5000
- Per Day Salary: 192.30
- Number of Working Days: 13
- Total Salary: 13 * 192.30 = 2450
- 12% PF on 2450 = 2450 * 12/100
- ESI 1.75% on 2450 = 2450 * 1.75/100

Thank you.

I am not talking about the gratuity. I am talking about the deductions we make on a monthly basis. I always deduct 12% of Basic + DA based on the number of days the person is present.

Regards,
Preeti Shukla

I understand your question about PF. Your calculation on PF is correct.

Regards

Srikanth, she is using method 2, where Sunday should not be added. PF would be on 13 days' basic salary only.

If an employee has worked for 13 days, then PF is calculated on a total of 13 + 2 w/off = 15 days because, as per the Weekly Holidays Act of 1942, every employee is eligible for one weekly holiday in the week after six days of working.

Regards

If we take the first method also, how can it be 18 days? It will be 15 days, i.e., 15 + 2 (Sundays). How can we account for those Sundays for the weeks he has not worked? Please clarify.

Regards,
Preeti Shukla

Don't create confusion for yourself. What system do you use for salary preparation? First, decide for yourself.

As per the statement of Pawandarda, if you are using the 2nd method, then Sunday is not calculated in the salary.

Hi Nirav, I asked because I wanted to know if we choose the first method, then his reply was different from others. This response was also conveyed to me by a lawyer, so I inquired for the sake of my knowledge.

Regards, Preeti Shukla

EPF Act Applicability

Section 1(5) of the EPF Act states, "An establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time falls below twenty." The EPF Act, once applicable, will continue even when the number falls below the prescribed limit.

Reference: Kottahala Handloom Weavers Industrial Coop. Society v. Enforcement Officer, 2008 LLR 744 (Ker HC)

Regards,
Suresh

Preethi, if any person works for 13 days, how many Sundays fall within those 13 days? For example, if the total days are 13, and the person has attended from day 1 to day 13, you can only count the Sundays that fall between days 1 and 13 (which may be 2 or 1). Therefore, the count could be 13 + 1 or 2. It's important to note that you cannot consider all Sundays in the month as working days.

Regards,
V K Rao

If the employee is on a monthly salary, you pay the salary only for the number of days worked and pay EPF & ESI accordingly. If the 13th day is a Saturday, you need not pay for Sunday. Also, if yours is a factory, because the Factories Act does not provide for wages for a weekly holiday. It provides for a holiday only. If yours is a commercial establishment, verify with the Shop & Commercial Establishment Act of your state. If that Act provides for a weekly holiday with wages if the employee has worked for all six days prior to the weekly off, then you have to pay for Sunday also.

Regards,
Varghese Mathew
Baseindia Consultants
Trivandrum 14
[Phone Number Removed For Privacy Reasons]