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Type: HR, Report if not a HR topic
Hi Sahaja!
In continuation with earlier reply here is some details about ESI:
Rate of Contribution of the wages:
Employers’ 4.75%
Employees’ 1.75%
Payment of contribution:
The total amount of contribution (employee’s share and employer’s share) is to be deposited with the authorised bank through a Challan in the prescribed form in quadruplicate on or before 21st of month following the calendar month in which the wages fall due.
Benefits:
Medical, Sickness, Extended Sickness for certain diseases, dependents maternity, besides funeral expenses, rehabilitation allowance, medical benefit to insured person and his or her spouse.
Wages:
The following are to be deemed as wages
Basic pay
Dearness allowance
House rent allowance
City compensatory allowance
Overtime wages (but not to be taken into account for determining the coverage of an employee)
Payment for day of rest
Production incentive
Bonus other than statutory bonus
Night shift allowance
Heat, Gas & Dust allowance
Payment for un-substituted holidays
Meal/food allowance
Suspension allowance
Lay- off compensation
Children education allowance (not being
The following are NOT to be deemed as wages:
Contribution paid by the employer to any pension/provident fund or under ESI Act.
Sum paid to defray special expenses entailed by the nature of employment – Daily allowance paid for the period spent on tour.
Gratuity
Pay in lieu of notice of retrenchment compensation
Benefits paid under the ESI Scheme.
Encashment of leave
Payment of Inam, (if it does not form part of the terms of employment).
Washing allowance for livery
Conveyance Amount towards reimbursement for duty related journey
Contribution period
1st April to 30th September.
1st October to 31st March
Eg: If the person joined insurance employment for the first time, say on 5th January, his first contribution period will be from 5th January to 31st
March and his corresponding first benefit will be from 5th October to 31st December
Hoping our other members may give more clarity to you regarding ESI and PF.
Regards,
Suneel G
Hi Sahaja!
In continuation with earlier reply here is some details about ESI:... See Suneel Kumar's complete reply
Hi Suneel ,
Very clear explanation good....
Thanx a lot.....
Sahaja
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ESI & PF
Type: HR, Report if not a HR topic
Posted 06-12-2008Reply
Hi,
Can anyone tellme about ESI & PF what is the procedure to calculating them......
Sahaja
Hi Sahaja!
Let me try to explain the topic as far as my knowledge is concerned.
Provident Fund:
Clarification about Contribution:
After revision in wage ceiling from Rs.5000 to Rs.6500 wef.1.6.2001 per month, the government will continue to contribute 1.16% up to the actual wage of maximum Rs.6500 per month towards Employees’ Pension Scheme.
The employer’s share in the Pension Scheme will be Rs.541 wef.1.6.2001.
Under Employees’ Deposit-Linked Insurance Scheme the contribution @ 0.50% is required to be paid up to a maximum limit of Rs.6500.
The employer also will pay administrative charges @ 0.01% on maximum limit of Rs.6500 whereas an exempted establishment will pay inspection charges @ 0.005% on the total wages paid.
Notes:
The above clarification is given by taking wages up to a maximum of Rs.6500 towards wage (basic +DA).
Since an excluded employee i.e. drawing wages more than Rs.6500 can also become member of the Fund and the Schemes on joint request and if, for instance, such an employee is getting Rs.10, 000 per month, his share towards provident fund contribution will be Rs.1200 e.g. 12% and employer’s share towards provident fund contribution will be Rs.659 and Rs.541 towards Employees’ Pension Fund.
Benefits:
Employees covered enjoy a benefit of Social Security in the form of an un attachable and can withdraw for severely restricted circumstances like buying house, marriage/education, etc. only financial nest egg to which employees and employers contribute equally throughout the covered persons’ employment. This sum is payable normally on retirement or death. Other Benefits include Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme.
Payment of Contribution:
The employer shall pay the contribution payable to the EPF, DLI and Employees’ Pension Fund in respect of the member of the Employees’ Pension Fund employed by him directly by or through a contractor.
It shall be the responsibility of the principal employer to pay the contributions payable to the EPF, DLI and Employees’ Pension Fund by himself in respect of the employees directly employed by him and also in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor.
Damages:
Less than 2 months …. @ 17% per annum
Two months and above but less than up to four months ….@22% per annum
Four months and above but less than up to six months …. @ 27% per annum
Six months and above
Calliculations:
Normally PF contributions are calliculated on Basic Wages.
12% on Basic is called as Employee share (deducted from Employee)
12% on Basic is called as Employer share (contributed by Employer)
For remaining contributions you may see the above.
Regards,
Suneel G
Let me try to explain the topic as far as my knowledge is concerned.
Provident Fund:
Clarification about Contribution:
After revision in wage ceiling from Rs.5000 to Rs.6500 wef.1.6.2001 per month, the government will continue to contribute 1.16% up to the actual wage of maximum Rs.6500 per month towards Employees’ Pension Scheme.
The employer’s share in the Pension Scheme will be Rs.541 wef.1.6.2001.
Under Employees’ Deposit-Linked Insurance Scheme the contribution @ 0.50% is required to be paid up to a maximum limit of Rs.6500.
The employer also will pay administrative charges @ 0.01% on maximum limit of Rs.6500 whereas an exempted establishment will pay inspection charges @ 0.005% on the total wages paid.
Notes:
The above clarification is given by taking wages up to a maximum of Rs.6500 towards wage (basic +DA).
Since an excluded employee i.e. drawing wages more than Rs.6500 can also become member of the Fund and the Schemes on joint request and if, for instance, such an employee is getting Rs.10, 000 per month, his share towards provident fund contribution will be Rs.1200 e.g. 12% and employer’s share towards provident fund contribution will be Rs.659 and Rs.541 towards Employees’ Pension Fund.
Benefits:
Employees covered enjoy a benefit of Social Security in the form of an un attachable and can withdraw for severely restricted circumstances like buying house, marriage/education, etc. only financial nest egg to which employees and employers contribute equally throughout the covered persons’ employment. This sum is payable normally on retirement or death. Other Benefits include Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme.
Payment of Contribution:
The employer shall pay the contribution payable to the EPF, DLI and Employees’ Pension Fund in respect of the member of the Employees’ Pension Fund employed by him directly by or through a contractor.
It shall be the responsibility of the principal employer to pay the contributions payable to the EPF, DLI and Employees’ Pension Fund by himself in respect of the employees directly employed by him and also in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor.
Damages:
Less than 2 months …. @ 17% per annum
Two months and above but less than up to four months ….@22% per annum
Four months and above but less than up to six months …. @ 27% per annum
Six months and above
Calliculations:
Normally PF contributions are calliculated on Basic Wages.
12% on Basic is called as Employee share (deducted from Employee)
12% on Basic is called as Employer share (contributed by Employer)
For remaining contributions you may see the above.
Regards,
Suneel G
Hi Sahaja!
In continuation with earlier reply here is some details about ESI:
Rate of Contribution of the wages:
Employers’ 4.75%
Employees’ 1.75%
Payment of contribution:
The total amount of contribution (employee’s share and employer’s share) is to be deposited with the authorised bank through a Challan in the prescribed form in quadruplicate on or before 21st of month following the calendar month in which the wages fall due.
Benefits:
Medical, Sickness, Extended Sickness for certain diseases, dependents maternity, besides funeral expenses, rehabilitation allowance, medical benefit to insured person and his or her spouse.
Wages:
The following are to be deemed as wages
Basic pay
Dearness allowance
House rent allowance
City compensatory allowance
Overtime wages (but not to be taken into account for determining the coverage of an employee)
Payment for day of rest
Production incentive
Bonus other than statutory bonus
Night shift allowance
Heat, Gas & Dust allowance
Payment for un-substituted holidays
Meal/food allowance
Suspension allowance
Lay- off compensation
Children education allowance (not being
The following are NOT to be deemed as wages:
Contribution paid by the employer to any pension/provident fund or under ESI Act.
Sum paid to defray special expenses entailed by the nature of employment – Daily allowance paid for the period spent on tour.
Gratuity
Pay in lieu of notice of retrenchment compensation
Benefits paid under the ESI Scheme.
Encashment of leave
Payment of Inam, (if it does not form part of the terms of employment).
Washing allowance for livery
Conveyance Amount towards reimbursement for duty related journey
Contribution period
1st April to 30th September.
1st October to 31st March
Eg: If the person joined insurance employment for the first time, say on 5th January, his first contribution period will be from 5th January to 31st
March and his corresponding first benefit will be from 5th October to 31st December
Hoping our other members may give more clarity to you regarding ESI and PF.
Regards,
Suneel G
Hi Sahaja!
In continuation with earlier reply here is some details about ESI:... See Suneel Kumar's complete reply
Hi Suneel ,
Very clear explanation good....
Thanx a lot.....
Sahaja
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