Understanding PF and ESI: How Should I Break Down a Rs 20,000 Salary?

Hi Everyone,

I work as an HR in an IT company in Delhi, and now I have to handle statutory things like PF & ESI. However, I have some doubts regarding this. Can anyone tell me what should be the salary breakup & PF for Rs 20,000 per month? Is EPF contribution also a part of it?

I need clear information on this, please.

Dear All,

Can someone tell me the method in which the interest in EPF is calculated? Is it simple or compound interest? If compound, then over what time?

Regards,
Suresh

The salary breakup can be approximately 50% (should be more than the minimum wage basic amount) of the gross as basic, and 30 to 50% of the basic can be HRA. The travel allowance can be ₹1000, and the conveyance allowance can be ₹600 (total ₹1600). If anything remains, add it in education, medical, and special allowances.

PF Calculation for a Gross Salary of ₹20,000

Assuming the basic is ₹10,000:
- Employees' Contribution A/c. No.1: 12.00% - ₹1200
- Employers' Contribution A/c. No.1: 3.67% - ₹367
- Employers' Contribution A/c. No.10: 8.33% - ₹833
- Admin. Charges A/c. No.2: 0.85% - ₹85
- Admin. Charges A/c. No.21: 0.50% - ₹50
- Admin Charges A/c. No.22: 0.01% - ₹1

Total: 25.36% - ₹2536

Hi Anju,

Defining the salary structure of a company is not merely a general discussion as it also determines the increase or decrease in the liabilities of the company. While you may gain a general idea here, it may not fully serve the purpose of your company. I would recommend involving a consultant in this process.

Thanks & Regards,

Sanjeev Kumar Baliyan
Advocate & Consultant
Noida
Email: sanjeev.baliyan@clairvoyants.co.in
Mobile: 9971589511