Pf,pt,Esic
This query is : Resolved
27 September 2016
On which salary is the pf,pt,esic deducted?What are the limits of the same?
27 September 2016
PF & ESI is deducted on Basic Salary, P Tax is deducted on Gross salary(including all components of salary like, Basic, DA, HRA etc. and excluding PF and TDS), as per schedule prescribed by different state.
10 August 2024
Here's a detailed overview of the limits and applicable rules for Provident Fund (PF), Professional Tax (PT), and Employees' State Insurance Corporation (ESIC) in India:
### **1. Provident Fund (PF)**
**1.1 ** Applicability:**
- **Eligibility**: PF is applicable to organizations with 20 or more employees. For companies with fewer employees, it’s optional unless otherwise specified by state regulations.
- **Salary Cap**: PF contributions are required on the employee’s basic salary plus dearness allowance (DA) up to ₹15,000 per month.
**1.2 ** Contribution Rates:**
- **Employee’s Contribution**: 12% of basic salary + DA.
- **Employer’s Contribution**:
- 12% of basic salary + DA (split as 3.67% to EPF Account No. 1 and 8.33% to Employees’ Pension Fund Account No. 10).
- Additional 0.5% to 1% of basic salary for administrative charges.
**1.3 ** Ceiling for Contributions:**
- **Old Ceiling**: Up to August 31, 2014, PF contributions were capped at ₹6,500 of salary (which meant a maximum contribution of ₹780 per month).
- **New Ceiling**: From September 1, 2014, the ceiling was raised to ₹15,000 per month. Contributions are calculated on the actual salary if it exceeds ₹15,000.
### **2. Professional Tax (PT)**
**2.1 ** Applicability:**
- **Professional Tax**: Imposed by state governments, PT is applicable to employees and professionals earning above a certain threshold, which varies by state.
**2.2 ** Rates and Limits:**
- **Professional Tax Limits**: Varies by state. For example:
- **Maharashtra**: Maximum ₹2,500 per year.
- **Karnataka**: Maximum ₹2,500 per year.
- **West Bengal**: Maximum ₹2,500 per year.
- Some states have lower ceilings or different rates, so you should refer to the specific state's regulations.
**2.3 ** Collection and Payment:**
- **Employer’s Responsibility**: Employers are responsible for deducting and depositing PT on behalf of employees. PT is generally deducted based on monthly earnings and varies by income slabs.
### **3. Employees' State Insurance Corporation (ESIC)**
**3.1 ** Applicability:**
- **Eligibility**: ESIC is applicable to organizations with 10 or more employees (in Maharashtra and Delhi, the threshold is 20). It applies to employees earning up to ₹21,000 per month.
**3.2 ** Contribution Rates:**
- **Employee’s Contribution**: 0.75% of gross salary.
- **Employer’s Contribution**: 3.25% of gross salary.
**3.3 ** Ceiling for Contributions:**
- **Salary Cap**: Contributions are applicable on the gross salary up to ₹21,000 per month. If the employee’s salary exceeds this amount, ESIC contributions are not required beyond ₹21,000.
### **Summary**
- **PF**: Mandatory for organizations with 20 or more employees. Contributions are 12% each from employee and employer, calculated up to ₹15,000 of monthly salary.
- **PT**: Varies by state with a maximum limit usually around ₹2,500 per year.
- **ESIC**: Applicable to employees earning up to ₹21,000 per month, with contributions of 0.75% by the employee and 3.25% by the employer.
Always ensure compliance with the latest regulations and thresholds as set by the relevant authorities and state governments.
### **1. Provident Fund (PF)**
**1.1 ** Applicability:**
- **Eligibility**: PF is applicable to organizations with 20 or more employees. For companies with fewer employees, it’s optional unless otherwise specified by state regulations.
- **Salary Cap**: PF contributions are required on the employee’s basic salary plus dearness allowance (DA) up to ₹15,000 per month.
**1.2 ** Contribution Rates:**
- **Employee’s Contribution**: 12% of basic salary + DA.
- **Employer’s Contribution**:
- 12% of basic salary + DA (split as 3.67% to EPF Account No. 1 and 8.33% to Employees’ Pension Fund Account No. 10).
- Additional 0.5% to 1% of basic salary for administrative charges.
**1.3 ** Ceiling for Contributions:**
- **Old Ceiling**: Up to August 31, 2014, PF contributions were capped at ₹6,500 of salary (which meant a maximum contribution of ₹780 per month).
- **New Ceiling**: From September 1, 2014, the ceiling was raised to ₹15,000 per month. Contributions are calculated on the actual salary if it exceeds ₹15,000.
### **2. Professional Tax (PT)**
**2.1 ** Applicability:**
- **Professional Tax**: Imposed by state governments, PT is applicable to employees and professionals earning above a certain threshold, which varies by state.
**2.2 ** Rates and Limits:**
- **Professional Tax Limits**: Varies by state. For example:
- **Maharashtra**: Maximum ₹2,500 per year.
- **Karnataka**: Maximum ₹2,500 per year.
- **West Bengal**: Maximum ₹2,500 per year.
- Some states have lower ceilings or different rates, so you should refer to the specific state's regulations.
**2.3 ** Collection and Payment:**
- **Employer’s Responsibility**: Employers are responsible for deducting and depositing PT on behalf of employees. PT is generally deducted based on monthly earnings and varies by income slabs.
### **3. Employees' State Insurance Corporation (ESIC)**
**3.1 ** Applicability:**
- **Eligibility**: ESIC is applicable to organizations with 10 or more employees (in Maharashtra and Delhi, the threshold is 20). It applies to employees earning up to ₹21,000 per month.
**3.2 ** Contribution Rates:**
- **Employee’s Contribution**: 0.75% of gross salary.
- **Employer’s Contribution**: 3.25% of gross salary.
**3.3 ** Ceiling for Contributions:**
- **Salary Cap**: Contributions are applicable on the gross salary up to ₹21,000 per month. If the employee’s salary exceeds this amount, ESIC contributions are not required beyond ₹21,000.
### **Summary**
- **PF**: Mandatory for organizations with 20 or more employees. Contributions are 12% each from employee and employer, calculated up to ₹15,000 of monthly salary.
- **PT**: Varies by state with a maximum limit usually around ₹2,500 per year.
- **ESIC**: Applicable to employees earning up to ₹21,000 per month, with contributions of 0.75% by the employee and 3.25% by the employer.
Always ensure compliance with the latest regulations and thresholds as set by the relevant authorities and state governments.
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