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how to deduction ESI and PF

obalreddy (accountant) (282 Points)

21 January 2010

Dear friend

How to deduction ESI and PF, how much persentage deduction please help me friends

Thanking you

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5 Replies

VIGNESH (Manager Finance &Accounts) (327 Points)
Replied 21 January 2010

if the deduction is to employees, then the provident fund deduction should be 12% of salary, as per the act, salary means Basic+DA+Food Concession+retaining allowance if any, subject to a maximum salary of Rs. 6500/- the same amount should be contributed by Employer.

ESI is applicable if the salary is only below or equals to Rs. 10000

Employers contribution will be 4.75%
Employees contribution will be 1.75%

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Pankaj Choudhary (Accounts Manager) (60 Points)
Replied 22 January 2010

Employer contribution = 13.61%(In the case of EPF)

Employee contribution = 12% (in the case of EPF)

Employee contribution = 1.75% (In the case of ESI)

Employer contribution = 4.75% (in the case of ESI)

Deepak Tapse (Accounts Manager - Taxation) (1771 Points)
Replied 22 January 2010

Mr. Vignesh and Pankaj both are correct

Anbuselvam (CMA Final Pursuing) (240 Points)
Replied 16 April 2014

My Basic Rs 20000
Option # 1:
PF Deduction from Employee (12% on 20000) =Rs 2400
PF Contribution by Employer(12% on 20000) =Rs 2400 + 1.61% Admin charges

Option # 2:
PF Deduction from Employee (12% on 20000) =Rs 2400
PF Contribution by Employer(12% on 6500) =Rs 780 + 1.61% Admin charges

Option # 3:
PF Deduction from Employee (12% on 6500) =Rs 780
PF Contribution by Employer(12% on 6500) =Rs 780 + 1.61% Admin charges

Please let me know which option is incorrect and give your reason to rectify the incorrect option.