How Do You Calculate ESI, PF, and Gratuity Deductions from Total CTC?

Hi friends,

This is Arunodaya, pursuing MSW final year specializing in HRM at Loyola College. Could you please send me messages on how to calculate deductions for ESI, PF, and Gratuity from the total CTC?

Regards,
Arunodaya

You see "Downloads search" and "Type Search Query." Give your query there and try downloading; you should get.

Hi,

PF - 12% on basic salary for employee contribution.
PF - 13.67% on basic salary for employer contribution.
ESIC - Employee - 1.75% on gross salary.

Hi,

PF - 12% on basic salary for employee contribution.
PF - 13.67% on basic salary for employer contribution.
ESIC - Employee - 1.75% on gross salary.
Employer - 4.75% on gross salary.

PF - 12% on (basic salary + d.a.) for employee contribution. PF - 12% on (basic salary + d.a.) for employer contribution. ADMINISTRATION CHARGES 1.100% on (basic salary + d.a.) for employer contribution. E.D.L.I. CHARGES 0.500% on pension salary (Basic + da up to Rs. 6500) for employer contribution. INSPECTION CHARGES 0.010% on (basic salary + d.a.) for employer contribution. FOR EXAMPLE, FOR ONE EMPLOYEE, BASIC SALARY = 20020 & DEARNESS ALLOWANCE = 3500. TOTAL WORKERS = 1. TOTAL SALARY = 23520.00. COVERED UNDER EPF = 1. SALARY = 23520.00. EPF = 2822.00. COVERED UNDER PENSION = 1. SALARY = 6500.00. SALARY (Excess) = 17020.00. PENSION = 541.00. NOT COVERED UNDER EPF = 0. NOT COVERED WITH PENSION = 0. WORKER SHARE EPF = 2822.00. EMPLOYER SHARE EPF = 2281.00. TOTAL = 5103.00. WORKER SHARE PENSION = EMPLOYER SHARE PENSION = 541.00. TOTAL PENSION = 541.00. E.D.L.I. CHARGES 0.500% = 33.00. ADMINISTRATION CHARGES 1.100% = 259.00. INSPECTION CHARGES 0.010% = 2.00. TOTAL TO BE DEPOSITED = 5938.00.

Gratuity Calculation:
[ (Last drawn Basic + DA times 15 times text{No. of Years of Service}) / (text{No. of working days in a month}) ]

Eligibility: No. of years of service >= 5 years

Truly Yours,
Kumar H.P

Hi Friend,

I would like to know whether gratuity is calculated from the Gross or Basic salary.

Regards, Arunodaya

Dear Arun,

For PF - Salary means Basic, DA, cash value of any Food Allowance, and any other allowance directly related to the cost of living of employees. Employees' contribution will be 12% of their salary.

Employer Contribution goes under 4 heads:

1. Employee Pension Scheme - 8.33% of salary or Rs. 541, whichever is lower. Out of the 8.33%, any amount above Rs. 541, if applicable, will go to the provident fund.

2. Provident Fund - 3.67% of salary. Please note that any amount above Rs. 541 will also be added.

3. Employees' Deposit Linked Insurance Scheme - 1.10% of salary.

4. Administrative Charges - 0.51%.

Therefore, altogether, the employer contribution comes to 13.61%.

For ESI,

Salary means Gross Salary, including metro allowance but excluding laundry allowance, entertainment allowance, etc. Employee Contribution is 1.75% of Salary rounded off to the next highest Rupee. For example, if 1.75% of gross salary is Rs. 52.10, then the employee contribution will be Rs. 53. If the salary of an employee is more than 10,000, then we don't have to remit the contribution for them towards ESI. Note that remittances to ESI are counted as two contribution periods, i.e., April to September and October to March. If an employee's salary is 9000 in April, ESI contribution must be remitted. If in May they get a promotion and their salary in May is 11000, ESI should still be deducted, even though their salary is more than 10000. This should continue until the end of the contribution period, up to September.

For Gratuity,

Salary means Basic, DA, cash value of any Food Allowance, and any other allowance directly related to the cost of living of employees. It is paid to employees who have more than 5 years of continuous service at the time of resignation, or to the employee at the time of their retirement, permanent disablement, or death. The calculation is Last drawn Salary * Number of years in Service * 15/26. Note that if an employee resigns after 5 years and 6 months, the number of years in service will be treated as 6 years. Otherwise, it will be treated as 5 years only.

Hope this information is helpful. For more details, you may contact me at adv.arun@gmail.com.

Hi,

Please find the attachment for gratuity calculation.

Thanks,
Tanu

Hi friends,

This is Sanjeevareddy. I am working in a pharma company. How can you calculate the PF, ESI, PT? Please find attached the PF, ESI, PT calculations.

I am looking for some guidance in terms of ESIC card usage and entitlement. I would like to know the maximum coverage an employee can avail of and if there is any limit on the amount that can be used. Is cashless treatment available with this card? Do you have any documents regarding the same?

Thanks,
Sonal

See the ESI & PF calculation collation.

Thanks & Regards,
R. Lenin

PF - 12% for employees and 13.61% for employers.
ESI - 1.75% for employees and 4.75% for employers.

Professional tax is deducted once every 6 months only.
Regards.

Please help me with how to make journal entries for PF, ESI, and gratuity of college lecturers in TALLY 9ERP.

For PF

Salary means Basic, DA, Cash value of any Food Allowance, and any other allowance directly related to the cost of living of employees. Employees' contribution will be 12% of their salary. Employer Contribution goes under four heads:

1. Employee Pension Scheme - 8.33% of salary or Rs. 541, whichever is lower. Out of the 8.33%, the amount above Rs. 541, if any, will go to the provident fund.
2. Provident Fund - 3.67% of salary. Here, please note that the amount above Rs. 541 will also be added.
3. Employees Deposit Linked Insurance Scheme - 1.10% of salary.
4. Administrative Charges - 0.51%.

Altogether, the employer contribution comes to 13.61%.

For ESI

Salary means Gross Salary including metro allowance but excluding laundry allowance, entertainment allowance, etc. Employee Contribution is 1.75% of Salary, rounded off to the next highest Rupee. For example, if 1.75% of gross salary is Rs. 52.10, then the employee contribution will be Rs. 53. If the salary of an employee is more than 10,000, then we don't have to remit a contribution for him towards ESI. However, please note that remittances to ESI are counted as two contribution periods, i.e., April to September and October to March. If an employee's salary is 9000 in April, he has to remit the ESI contribution. If in May he gets a promotion and his salary in May is 11,000, then ESI should still be deducted from him even though his salary is more than 10,000. This should continue till the end of the contribution period, i.e., up to September.

For Gratuity

Salary means Basic, DA, Cash value of any Food Allowance, and any other allowance directly related to the cost of living of employees. It is paid to employees who have more than 5 years of continuous service at the time of resignation, or to the employee at the time of his retirement, permanent disablement, or death. The calculation is Last drawn Salary * Number of years in Service * 15/26. Note that if an employee resigns after 5 years and 6 months, the number of years in service will be treated as 6 years. Otherwise, it will be treated as 5 years only.