How Do I Prepare for PF and ESI Compliance with Our Growing Team? Urgent Help Needed

Presently, we are approaching the end of the financial year and revising the employees' CTC package. For the past 8 months, we have not been engaged in PF and ESI contributions because the employee strength was low. However, within 2 months, our strength is going to increase, so we are in a situation where we need to comply with statutory norms. I need to prepare a breakdown for PF and ESI.

Request for PF and ESI Breakdown

Kindly help me with the breakdown from BASIC to ESI percentage value, including where PF should be deducted and information on DA percentage.

This is very urgent. Please assist me in clearing up this confusion.

To comply with statutory norms regarding PF and ESI contributions due to the increased employee strength, follow these steps:

1. Calculate the Basic Salary (excluding allowances) of each employee.
2. Deduct 12% of the Basic Salary for PF contribution. This amount should be contributed to the employee's PF account.
3. For ESI, deduct 0.75% of the Gross Salary (Basic + DA) from the employee's side and contribute 3.25% from the employer's side.
4. Ensure that the DA percentage is calculated based on the company's policy and included in the Gross Salary for ESI calculations.
5. Communicate these changes to all employees transparently and provide them with the necessary information regarding their contributions and benefits.
6. Stay updated with the latest PF and ESI regulations to ensure compliance and avoid any penalties or legal issues.

For specific details and official guidelines, refer to the Employees' Provident Fund Organisation (EPFO) and the Employees' State Insurance Corporation (ESIC) websites.