Confused About Salary Deductions? Let's Break Down TDS, PF, ESI, and Professional Tax Calculations

Kindly help me with how to calculate TDS, PF, ESI, professional tax, whether on gross salary or net salary. What will be the slab percentages for TDS, PF, ESI, professional tax from salary 0 to 10 LPA.

Kindly help me with how to calculate TDS, PF, ESI, and professional tax - whether on gross salary or net salary. What will be the slab percentages for TDS, PF, ESI, and professional tax from salary 0 to 10 LPA.

Hi,

ESI is applicable only for those employees whose gross salary is up to 10,000/- rupees per month, and it's calculated at 1.75% of gross salary from the employee's side and 4.75% of the same from the employer's side.

PF is calculated on basic salary + Dearness allowance only. It is calculated at 12% of basic salary from both sides. Out of the employer's 12% contribution, only 3.67% goes to PF, and the rest goes to the Pension Fund. The maximum ceiling to be covered under this Act is 6,500/- basic salary. Even employees earning more can also be included.

Professional Tax is calculated on gross per month, and it's fixed for a level. For employees who are earning up to 6,000/-, the deduction would be 20/- rupees, but it varies from state to state.

Regards, Amit Seth.

Hello,

I have one more query in this regard. As mentioned, ESI is applicable up to a gross salary of Rs. 10,000. I wanted to know whether employees earning more than that amount are not to be included in ESI.

Thanks,
Rachana

Hi all
Based on below details ESIC to be deducted, Drawing wage upto 10000

To be deemed as wages

· Basic pay
· Dearness allowance
· House rent allowance
· City compensatory allowance
· Overtime wages (but not to be taken into account for determining the coverage of an employee)
· Payment for day of rest
· Production incentive
· Bonus other than statutory bonus
· Night shift allowance
· Heat, Gas & Dust allowance
· Payment for unsubstituted holidays
Regards
Subrahmanyam

Dear Rachna,

ESI contribution is applicable only for a salary up to Rs. 10,000. If the salary is greater than Rs. 10,000, no ESI deduction is done.

Regards,
Anu

Dear Anu,

As you mentioned, we cannot deduct ESI if the salary is more than Rs 10,000. However, I observed that one of the leading pharma companies deducted ESI even when the gross salary was Rs 11,000.

What should be the appropriate course of action in this situation? Is it considered valid?

Thanks,
Rachana

To be deemed as wages

· Basic pay
· Dearness allowance
· House rent allowance
· City compensatory allowance
· Overtime wages (but not to be taken into account for determining the coverage of an employee)
· Payment for day of rest
· Production incentive
· Bonus other than statutory bonus
· Night shift allowance
· Heat, Gas & Dust allowance
· Payment for unsubstituted holidays
· Meal/food allowance
· Suspension allowance
· Lay off compensation
· Children education allowance (not being reimbursement for actual tuition fee)
we consider all this while calculating ESI so go through it and find out how this 11000rs come what are things included in this

Hi Friends,

Please see the attachment regarding Salary structure. Complete details & procedures.

Regards,
Mahesh K. Prasad

Very true, Miss Singh. Gross salary includes all these components, and deductions are made from the same.

Regards,

Amit Seth

Hi Ram,

Find the attached Excel sheet.

The SLAB can be adjusted as per year.

For professional tax:

- 0 to 5000: nil
- 5000 to 10000: 175
- 10000 and above: 200 Rs per month.

I think your query is now clear.

Regards,
Anil Kumar

Hi there!

Thank you for reaching out. I have reviewed your input and made the necessary corrections for spelling and grammar. If you have any more text you would like me to check, feel free to send it my way.

Best regards

I have forgotten.... Would like to know, whether 'Conveyance Allowance' being part of gross wages is treated as ESI Wages.

Yes, all the fixed components, if part of the gross salary, will attract ESIC.

Hi Kumud, still, the notification has not been issued from the ESIC regarding the increase in the ceiling from ₹10,000 to ₹15,000 gross salary.

Amit Seth.

An employee who is earning more than Rs. 10,000 per month is not covered under the ESIC scheme, which means they are exempted.

Now, as per the new policy, the ESIC amount will be deducted for employees whose salary ranges up to 15,000/-.

ESI is applicable on gross salary up to Rs. 15,000/-. Gross salary includes all the components.

EPF is calculated always on basic + DA. Some companies include DA in basic. The employer is liable to contribute his share on Rs. 6,500 only. However, if he wants to contribute on an amount above Rs. 6,500, he can.

Sanjeev

Dear All,

Greetings!

Just wanted to share updates regarding ESI. The ESI ceiling has been increased to Rs. 15,000.

Please find the details attached below regarding the calculation of PT, ESIC, PF, etc. Thank you.

Regards.

ESI Limit and Calculation

The ESI limit is ₹15,000, not ₹10,000. The calculation is 1.75% of the gross salary from the employee's side and 4.75% from the employer's side.

Professional Tax (PT)

PT varies from state to state.

Provident Fund (PF) Calculation

PF will be 12% of the Basic salary. You can limit it to ₹780 as per the law. Two portions will be calculated - 12% from the Employee and 12% from the Employer. If any employee is getting a basic salary of more than ₹6,500, they can opt out of PF, but they need to submit Form 11 for the same.

Regards,
Suneel.