Hi All, I just want to know if PF and ESI are optional or compulsory for everyone, as one employee receives a monthly salary of 18k. The company also deducts cab charges from the salary. However, if PF and ESI are also deducted from the salary, then the take-home salary will be significantly reduced, making it challenging to survive. Can the employee ask the employer not to deduct the PF and ESI if he does not want these benefits?
Thanks,
Priyanka
From India, Delhi
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1Thanks,
Priyanka
From India, Delhi
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Hi all, Please clarify my question. For example, an employee's gross salary is 3496 + 3345 = 6841. If the employee is present for 31 days, including weekly offs, the employee gets a salary of 6841. Deducting PF 820 and ESIC 120, the total deductions equal 940. Therefore, the take-home salary would be 6841 - 940 = 5901. Am I correct?
PF Challan and Wage Consideration
Now, I am generating a PF challan. Which wage part should I consider, and what about the ESIC in the gross amount? I want to know which amount is accurate: 6500 * 12% = 780, or 6841 * 12% = 820. Please clarify this doubt.
From India, Bangalore
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PF Challan and Wage Consideration
Now, I am generating a PF challan. Which wage part should I consider, and what about the ESIC in the gross amount? I want to know which amount is accurate: 6500 * 12% = 780, or 6841 * 12% = 820. Please clarify this doubt.
From India, Bangalore
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As per the government laws, it is compulsory to deduct ESIC for employees whose salary is below ₹15,000 per month, though this limit may vary from state to state. I am not sure if it's optional or completely discontinued for salaries above ₹15,000, but it's definitely not mandatory to be deducted above that limit. You mentioned that your salary is ₹18,000 per month, so you can definitely opt out of it.
EPF Deduction
For EPF, it is also to be deducted from the salary, but if it's being deducted from your salary for the first time ever in your professional career, employees do have an option to opt out of it. If ever in past experiences or companies your PF has been deducted, then it's mandatory for the employer to deduct the PF from employees' salary irrespective of their choice.
I hope this information suffices. Anything else, please feel free to get in touch.
Regards
From India, Chandigarh
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EPF Deduction
For EPF, it is also to be deducted from the salary, but if it's being deducted from your salary for the first time ever in your professional career, employees do have an option to opt out of it. If ever in past experiences or companies your PF has been deducted, then it's mandatory for the employer to deduct the PF from employees' salary irrespective of their choice.
I hope this information suffices. Anything else, please feel free to get in touch.
Regards
From India, Chandigarh
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Anxita, Being an HR exe do not carry the idea that ,Rs 15000/- limit for ESI may vary from state to state. Varghese Mathew
From India, Thiruvananthapuram
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From India, Thiruvananthapuram
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Thanks, Axita,
Is there a limit on the basic salary? Actually, this is the total salary, and the basic would be around 40% or 50% of the total. The same rule applies if the basic salary is less.
Priyanka,
There's nothing to do with the basic salary when deciding the deductions for EPF & ESIC, though the basic salary does play a role once you're eligible for deductions. So, based on the information provided by you, ESIC would not be applicable to you. For EPF, if your PF has ever been deducted in your professional career, it would be your choice to have the PF deducted or not if you are under PF for the first time. Employers need to have a form signed by you stating that you do not want your PF deducted.
However, personally, if I may suggest, you should have the PF deducted as it's like a fixed deposit, and you earn a good interest on that.
Regards
From India, Chandigarh
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Is there a limit on the basic salary? Actually, this is the total salary, and the basic would be around 40% or 50% of the total. The same rule applies if the basic salary is less.
Priyanka,
There's nothing to do with the basic salary when deciding the deductions for EPF & ESIC, though the basic salary does play a role once you're eligible for deductions. So, based on the information provided by you, ESIC would not be applicable to you. For EPF, if your PF has ever been deducted in your professional career, it would be your choice to have the PF deducted or not if you are under PF for the first time. Employers need to have a form signed by you stating that you do not want your PF deducted.
However, personally, if I may suggest, you should have the PF deducted as it's like a fixed deposit, and you earn a good interest on that.
Regards
From India, Chandigarh
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Understanding PF and ESI Deductions
Please understand that although PF and ESI are statutory deductions, they are calculated from different parts of the salary. PF is calculated from Basic + D.A., whereas ESI is calculated from Gross.
If one satisfies the conditions below simultaneously, then he/she is exempted from PF deductions (by filling out form no. 11):
1. If Basic + D.A. is more than 6500.
2. PF was never deducted from the employee prior to the present job.
Similarly, if your Gross is less than 15000/- per month, then ESI deduction is applicable, otherwise not.
Regards,
Ramya Ranjan
From India, Bhubaneswar
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Please understand that although PF and ESI are statutory deductions, they are calculated from different parts of the salary. PF is calculated from Basic + D.A., whereas ESI is calculated from Gross.
If one satisfies the conditions below simultaneously, then he/she is exempted from PF deductions (by filling out form no. 11):
1. If Basic + D.A. is more than 6500.
2. PF was never deducted from the employee prior to the present job.
Similarly, if your Gross is less than 15000/- per month, then ESI deduction is applicable, otherwise not.
Regards,
Ramya Ranjan
From India, Bhubaneswar
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PF - TAKE HOME SALARY REDUCE NOW.pdf
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