Confused About PF and ESI Deductions? Need Clarity on Correct Salary Breakdown

I am J. Raja Moahmed, working as an HR Assistant. I have a small doubt regarding PF & ESI deductions.

For a Gross Salary of Rs. 10,000, the breakdown is as follows:
- Basic: Rs. 4000
- HRA: Rs. 2000
- Conveyance: Rs. 800
- Medical Allowance: Rs. 800
- Special Allowance: Rs. 2400

My doubt is whether deducting PF from Basic is correct, and if deducting ESI from Gross is also correct. Is this method accurate? Please advise on the correct method.

Dear Raja,

Firstly, check the current minimum wage of your company's location (State), and then create a salary breakdown.

Thank you.

Dear Raja,

Your method is correct. PF will be deducted from the basic salary, and ESI will be deducted from the gross salary.

Thank you.

I think PF is calculated from Basic and all other allowances excluding HRA. (Kindly check) ESI is calculated from Gross only.

Thank you.

PF is to be recovered from basic payable and other allowances paid. The only exemption is on the payment of HRA.

Dear All,

Please find PF and ESIC deduction calculation below.

PF - PF is always deducted on Basic+VDA+Food allowance.

ESIC - ESIC is deducted on Gross wages/salary (Gross salary/wages include Basic+VDA+Food allowance).

Thanks & Regards,

Ashish Shaw
Email: ashishshaw@gmail.com