10 August 2024
Certainly! Here's a practical overview of Provident Fund (PF) and Employees' State Insurance (ESI) for a clearer understanding:
### **1. Provident Fund (PF)**
#### **a. Rates and Calculation**
- **Employee Contribution:** 12% of Basic + Dearness Allowance (DA) - **Employer Contribution:** 12% of Basic + DA - Of this 12%: - **3.67%** goes to the **Provident Fund Account (PF A/c No. 1)**. - **8.33%** goes to the **Pension Fund (PF A/c No. 10)**.
- **Maximum Salary for PF Contribution:** PF is calculated up to a maximum of ₹15,000 per month. If an employee’s basic salary + DA exceeds ₹15,000, the employer and employee contributions are capped at ₹1,800 per month (12% of ₹15,000).
#### **b. Returns and Relevant Dates**
- **Monthly Returns:** Form 5, 10, and 12A are to be submitted monthly. - **Form 5:** For newly joined employees. - **Form 10:** For employees who have left or have been transferred. - **Form 12A:** Summary of monthly PF contributions.
- **Annual Return:** Form 3A and Form 6A - **Form 3A:** Annual statement for each employee. - **Form 6A:** Annual return of contributions.
- **Due Dates:** - Monthly PF contributions are due by the 15th of the following month. - Annual returns are usually due by April 30th of the following financial year.
#### **c. Forms and Registers**
- **PF Forms:** - **Form 11:** Employee Declaration Form. - **Form 13:** For transferring PF. - **Form 19:** For final settlement. - **Form 10C:** For pension claim.
- **Registers to Maintain:** - **PF Register:** Record of employee contributions. - **Attendance Register:** Basis for salary and contributions. - **Salary Register:** Detailed record of payments.
### **2. Employees' State Insurance (ESI)**
#### **a. Rates and Calculation**
- **Employee Contribution:** 0.75% of Gross Salary - **Employer Contribution:** 3.25% of Gross Salary - **Gross Salary** includes Basic, DA, and other allowances.
- **Coverage Limit:** ESI is applicable to employees earning up to ₹21,000 per month (₹25,000 for employees with disabilities). Employees earning above this limit are not covered under ESI.
- **Annual Return:** Form 7A - **Form 7A:** Summary of ESI contributions for the year.
- **Due Dates:** - ESI contributions must be paid by the 15th of the following month. - Annual returns are generally filed by April 30th of the following financial year.
- **Registers to Maintain:** - **ESI Register:** Record of employee contributions. - **Attendance Register:** To determine eligibility and contributions. - **Salary Register:** Detailed record of salary and ESI deductions.
### **Summary**
- **PF Contributions:** - **Employee:** 12% of Basic + DA. - **Employer:** 12% of Basic + DA (3.67% to PF A/c No. 1, 8.33% to Pension Fund). - **Capped at:** ₹15,000 basic + DA.
- **ESI Contributions:** - **Employee:** 0.75% of Gross Salary. - **Employer:** 3.25% of Gross Salary. - **Coverage Limit:** Up to ₹21,000 gross salary.
- **Returns and Forms:** - **PF:** Forms 5, 10, 12A (monthly); Forms 3A, 6A (annual). - **ESI:** Form 6 (monthly); Form 7A (annual).
Maintaining accurate records and timely submissions is essential to ensure compliance with PF and ESI regulations.
CAclubindia
