Simplified Guide to Calculating ESI and EPF Contributions: Are You Doing It Right?

Calculating Employee State Insurance (ESI) and Employee Provident Fund (EPF) contributions is vital in HR. Here's a simplified approach:

ESI Calculation:

1. Identify employees eligible for ESI (earning ≤ Rs. 21,000 gross per month).
2. Deduct 0.75% of gross salary as employee contribution and 3.25% as employer contribution.
3. Calculate deductions and contributions accurately and pay them to the ESI department.

EPF Calculation:

1. Determine eligible employees (earning ≤ Rs. 15,000 basic + DA per month).
2. Deduct 12% of basic + DA as employee contribution and an equal amount from the employer.
3. Consider contribution to Employees' Pension Scheme (EPS) and calculate accordingly.
4. File monthly EPF returns on time.

It's crucial to stay updated with changing rules and regulations and consider consulting professionals for accuracy.

In ESI gross calculation, which components can be included?

Components Included in ESI Gross Calculation

In Employee State Insurance (ESI) gross calculation, the following components can be included:

1. Basic Salary
2. Dearness Allowance (DA)
3. House Rent Allowance (HRA)
4. Special Allowance
5. City Compensatory Allowance
6. Conveyance Allowance
7. Other Allowances (if they are considered for ESI)

Please note that not all allowances or components may be considered for ESI calculation, and the specific rules may vary depending on the organization's policies and applicable laws. It's important to consult with your HR department or legal experts to ensure accurate ESI calculation for your specific situation.