Balancing HR Duties: How Do I Calculate PF and ESI for Our Team of 30?

Dear All, I'm working as an accounts manager, and now I have been assigned HR duties as well. Starting from April 2023, it will be my responsibility to manage PF and ESI contributions. I need to understand the calculations, as well as the pros and cons from both the employer's and employee's perspectives.

In our office, we have a total of 30 employees, out of which 10 earn a salary below 20,000. I am seeking assistance in calculating the contributions. Additionally, I need to break down the salary details and raise awareness among employees regarding PF and ESI.

Can anyone provide guidance on these calculations? Your help would be greatly appreciated.

Thank you.

Is your company presently covered by ESI and EPF? You have stated that your establishment has 30 employees. I am afraid you have not taken registration yet!

Understanding ESI and EPF Coverage

Both of these legislations are social security legislations, and you cannot enforce them considering their pros and cons. The positive side of registering under ESI and EPF is a tension-free business. Once you have complied with the provisions of the law, you need not worry about that side. As an employer, you can concentrate on your basic priorities, i.e., finance and marketing. On the other hand, you can expect an Inspector to come to your office at any time. If some accident happens, do you know how much the employer will incur in terms of medical bills, compensation (under the Workmen Compensation Act), rehabilitation expenses, etc.? If covered by ESI and paying the contributions, you don't need to spend anything extra as the ESIC will take care of it. For employees, as it provides medical coverage for themselves and their families, including dependent parents without any consideration of their age, it offers significant benefits. EPF, being one of the most attractive investments for the future, gives employees an opportunity to save for tomorrow.

Eligibility and Registration Requirements

Your establishment will be covered by ESI from the date on which your number of employees reaches 10 and by EPF from the date on which the number of employees reaches 20. For this establishment coverage, the salaries your employees are receiving are totally irrelevant. It is acceptable that you do not need to register under ESI for those whose monthly salaries exceed Rs 21,000. Similarly, you can exclude employees earning more than Rs 15,000 from PF subject to certain conditions. Since you have taken registrations retrospectively, you have to remit both employees' share as well as the employer's share for the past period with interests and damages as decided by them. For future contributions payable, you can deduct the employees' share from their salaries.