# Calculation of ESI & PF

This query is : Open

Querist : Anonymous (Querist) 06 November 2009

Dear Sir

I want to know Calculation and Accounting Entries of PF and ESI

Thanking You:-

Ram Avtar Singh (Expert)
07 November 2009

PF is deducted on Basic salary i.e Basic + DA is Rs. 15000/- or less above that PF is not deducted.
1) Employee â€“ 12 % (of Basic + DA & Food concession allowance & retaining allowance, if any)
2) Employer â€“ 13.61 % (of Basic + DA & Food concession allowance & retaining allowance, if any)
[ 13.61 % = 3.67 % PF + 8.33 % Pension Scheme + 1.10 % Admin. Charges of PF + 0.5 % EDLI + 0.01 % Admin Charges of EDLI ]

EDLI - Employee deposit link insurance

The maximum ceiling limit of PF - Rs.15000/-from 01/09/2014
If the basic + DA exceeds 15000/- than the contributions is optional. Some company may have their own company policies.

Provident fund is calculated towards the employers is 13.61%
1. Employers Contribution
2.EPF A/c No.1 - 3.67%
3.EPF - Admn Charges - 1.1%
4.Pension Fund A/c No.10 - 8.33%
5.EDLI A/c No.21 - 0.5%
6.EDLI - Admn Charges - 0.01%

ESIC calculation:
-------------------
In this ESIC, it includes the medical benefit both for the employee and employer.
It has been calculated on the basic of gross pay per month and maximum limit is upto Rs.15000/- p.m
Employee side - 1.75% and Employer side - 4.75%.
So if the gross of an employee is 8000/- p.m his contribution would be 8000*1.75% = 140/-
Employer 8000*4.75% = 380/-
Therefore Net pay = Gross pay - Total deductions
1. Those who are getting 15000/- gross per month will not be applicable under ESIC act.
2. 20 eligible employees to get registered in ESIC
3. Eligible employees means those who are getting gross pay upto 15000/- or less per month.
Apart from that there is a tax deduction., it includes the Income & professional tax.

CTC means cost to the company.i.e .what are all the expenses incurred by the Company for any of its employee for a particular period(monthly/yearly)
gross pay + employers pf+employers ESI + bonus = CTC
i.e THE SALARY PAYABLE AND OTHER STATUTORY BENIFTS PAYABLE BY COMPANY.

CTC
-----
CTC is cost to company and the components are
Basic
+HRA
+CONVEYANCE
+MOBILE REIMBURSHMENT
+MEDICAL reimburshment
+All allowances
+LTA
+employer cotri of PF
+Employer Cotri towards ESI
+Total variable incentives
+Perks & benefits
+ insurance Premium (in case of Group insurance)

Gratuity calculation

t is been deposited @ 4.81% of Basic per month..
After completing 5 years of service one may claim Gratuity at the time of separation from the organisation and it is been paid @ 15 days of salary for per year of service...
Like for 6 years of experience one's gratuity will be calculated with this formula-

EPFO has cut the administrative fee charged from employers effective from 1st January 2015.

Existing Rate

New Rate

1.10 % of Total EPF Salary

0.85 % of Total EPF Salary

Minimum Rs 5 in case of Non Contributory Member

Minimum Rs 75 Per Month in case of non-functional establishment having no contributory member

Minimum Rs 500 for Contributory Members

Existing Rate

New Rate

0.01 % of Total EDLI Salary

0.01 % of Total EDLI Salary

Minimum Rs 2 in case of Non Contributory Member

Minimum Rs 25 Per Month in case of non-functional establishment having no contributory member

Minimum Rs 200 for Contributory Members

Ki\$hor B (Expert)
19 July 2012

bookmarked!

satpal (Expert)
14 September 2012

Sh. Ram Avtar Ji Thanks for such a nice information ,

However I would like one correction in your record .i.e .

Max. Limit for ESI is Rs. 15000.00 now instead of Rs. 10000.00

Over all I am fully agreed with the information provided by you.

Thanks & Regards

CA PRAVEEN SINGH (Expert)
20 November 2012

Agree with above..

CA AYUSH AGRAWAL (Expert)
08 December 2012

wow...what a info by ramavatarji.......

PANKAJ KUMAR (Expert)
06 March 2014

Nice information provided
keep it on ....!

Anbuselvam (Expert)
09 September 2015

From 01/09/2014, If Basic exceeds 15000, then PF contribution is optional. In this case, whether EDLI benefit will be applicable for those who we are paying PF (optional) on more than 15000 basic+DA.

Eg: One employee basic pay is 25,000 and joined in Dec 2014, company is deducting PF 3,000 on monthly basis. Will he gets EDLI benefit?

Anbuselvam (Expert)
09 September 2015

From 01/09/2014, If Basic exceeds 15000, then PF contribution is optional. In this case, whether EDLI benefit will be applicable for those who we are paying PF (optional) on more than 15000 basic+DA.

Eg: One employee basic pay is 25,000 and joined in Dec 2014, company is deducting PF 3,000 on monthly basis. Will he gets EDLI benefit?

You need to be the querist or approved CAclub expert to take part in this query .

### Similar Resolved Queries :

× Online Coaching My Enrolled Courses
Articles Forum News Experts Exams Share Files Income Tax Accounts Career Corporate Law Service Tax Video Judgements Rewards Top Members Events Albums Find Friends Featured Feed Scorecard Bookmarks Mock Test Poll Notification Knowledge Finder Coaching Institutes Trainee Corner Jobs