Payroll Confusion: How Do PF, ESIC, and Bonus Rules Apply to Our Small Team?

Hi, I have a few doubts. We have started a company with 5 employees. Are we supposed to deduct/contribute towards PF? There are some employees with salaries above and below 15000. What are the PF/ESIC/Bonus implications I should consider while processing their payroll?

You do not come under the purview of PF/ESI. For EPF, the statutory threshold is 20, and for ESI, it is 10/20, depending on whether you are working with or without power.

You should deduct 12% from their basic salary for PF and for ESIC, you should deduct 2.25% from their basic. Moreover, for ESIC, an additional contribution of 4.75% should be added from the employer's salary. You should deduct both as it is beneficial from the viewpoint of the employee.

Mr. Hranubhav,

Please go through the query. The person concerned is seeking guidance on whether the provisions are applicable or not, considering the number of persons employed by him. However, you are providing some incorrect or misleading information without delving into it. It is advisable not to make any statements if you do not have knowledge of the subject.

Mr. Devdas Krishnan, [Login to view] has given you the right advice.

P.K. Sharma