Understanding PF and ESI Deductions for Employees Earning Rs. 12,000 Monthly: What Are the Rules?

Dear HR Professionals,

I would like to know if PF and ESI both would be deducted from an employee's pay if he is earning nearly Rs. 12,000/- per month! If yes, then on what clause and section? Please help me out with the same.

Regards

Hi. In general scenario, the organizations have to deduct only the employee contribution or both ESI and EPF. Nowadays, many companies are following the CTC structure, where they consider both employee and employer contributions as the cost to the company.

Dear Sasmita,

If your factory/establishment is covered under ESI and EPF, you are obliged to deduct contributions from each eligible employee and also contribute your share as an employer and remit both in the respective accounts.

ESI should be remitted on or before the 21st day of the succeeding month, and PF is due on or before the 15th of the succeeding month. Both acts give the employer the authority to recover contributions from the employee(s).