Understanding ESI, PF, and Payroll: How Do They Impact Employee Benefits and Compliance?

What is ESI, PF, PAYROLL, and how are they used?

ESI stands for Employee State Insurance, which is a social security and health insurance scheme for Indian workers. PF refers to Provident Fund, a retirement savings scheme mandatory for Indian employees. PAYROLL is the system used by companies to calculate and distribute wages to employees.

These terms are essential components of employee benefits and compensation management in organizations. Understanding and effectively managing ESI, PF, and payroll processes are critical for ensuring compliance with labor laws and providing financial security to employees.

Dear Amit,

ESI stands for Employee State Insurance and is used for the benefit of the employee. If the gross salary of the employee is less than or equal to 10K, then it is applicable to the employee, and 1.75% of the amount will be deducted from the Gross salary. One can get medical benefits from the ESIC. For more details, please log on to esic.nic.in.

PF, which stands for Provident Fund, is applicable if the basic salary of the employee is less than or equal to 6500/-. 12% of the amount is deducted towards PF from the basic+DA, and this amount goes to the PF authority. The employer has to pay the same percentage, and they have to deposit the same into the PF Dept.

Payroll is a broad term that manages the salary part of every employee. In short, it includes the Salary structure, Taxation part, and reimbursement.

Regards,
Nirmal Kumar Sahu

What is the utility of ESI Card?

I have seen many ads for the ESI Card on TV. Could anyone please tell me the utility of the ESI card?

Sohan Aulakh

Hi, ESI stands for Employee State Insurance, PF for Provident Fund, and Payroll refers to the list of employees and the total amount of money that is to be paid to them. These are crucial components of employees' benefits and compensation packages.

Many people have already discussed these topics here, and there are also many documents attached for reference. To find more information, simply type in the keywords in the Cite HR Google search box at the top.

I hope this helps clarify the concepts for you. Let me know if you have any more questions.

I will be deducted by 26 days, then which days will I be paid in ESIC.

For example: Working Days 25, Wage 12500, Calendar Month: 30 Days. Which days have I taken and paid that employee by ESIC?

=12500/30*26 = 10833.00