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M.Sriram Shenoy (CA Final) (814 Points)

28 January 2008

I want to know about Provident Fund and ESI.

1.What are all the duties of an employer in respect of PF and ESI?

2.For whom does it apply?

3.Is it based on Salary of employees or number of employees?

4.At what rate should it be deducted?

5.What are all the due dates for its remittance?

6.What do you mean by contribution and recovery?

7.How to carry out a salary audit(Including PF, ESI and other statutory dues) of a 100crore turnover company and what are all the crucial and important things that should be kept in mind while carrying out a salary audit?

I am ready to read even if your reply is lengthy.

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3 Replies

CA. Amit Daga (Finance Controller CA. CS. CFA. CIFRS. M.COM. ) (9017 Points)
Replied 28 January 2008

hi, well any organisation where 2 or more employees are working covered under PF act....as per the rule both employer n employee contribute to it total contribution is 24% in which 12% contributed by employer n 12% by employee. ESI ACT It is applicable to non-seasonal power using factories employing 10 or more persons and non-power using factories employing 20 or more persons.The Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatre, road motor transport undertakings and newspaper establishment employing 20 or more persons.The existing wage-limit for coverage under the Act, is Rs.7500/- per month (with effect from 1.4.2004). Now it is 10000/- CONTRIBUTION The employee’s contribution rate (w.e.f. 1.1.97) is 1.75% of the wages and that of employer’s is 4.75% of the wages paid/payable in respect of the employees in every wage period. CONTRIBUTION PERIOD AND BENEFIT PERIOD There are two contribution periods each of six months duration and two corresponding benefit periods also of six months duration as under. Contribution period 1st April to 30th Sept. 1st Oct. to 31st March