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Calculation of ESI & PF (Accounts)

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This query is : Resolved

Author : Anonymous

( Author )
06 November 2009

Dear Sir

I want to know Calculation and Accounting Entries of PF and ESI
Please tell me with illustration.

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 – 12 % (of Basic + DA & Food concession allowance & retaining allowance, if any)
2) Employer – 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

CTC is cost to company and the components are
+MEDICAL reimburshment
+All allowances
+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.

EPF Admin Charges

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

EDLI Admin Charges

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



( 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


( Expert )
20 November 2012

Agree with above..


( Expert )
08 December 2012

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


( Expert )
06 March 2014

Nice information provided
keep it on ....!



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