ESI and PF Calculation Based on Pay Grade for India
Hello Everyone 😊
ESI and PF Calculate in India (As per Indian Govt.)
How to identify eligible employees? All employees of a covered unit, whose monthly incomes (excluding overtime, bonus, leave encashment) does not exceed Rs. 21,000 per month, are eligible to avail benefits under the Scheme. Employees earning daily average wage up to Rs.176 are exempted from ESIC contribution.
Any company with 20 or more employees is enabled with the option to deduct EPF. For EPF, an employee contributes 12 per cent of the basic salary while the employer contributes 8.33 per cent towards Employees’ Pension Scheme and 3.67 per cent to employees’ EPF(12% total).
Calculation on ESI and PF contribution I have created and assigned the rules based on Pay Grade.
On Job Information Pay grade the calculation differs.
For Calculation of EMPLOYER PF CONTRIBUTION (B) Component in salary structure, you need to consider below points
if the Basic salary is more than 15000 then it should 12% of it/
if the Basic salary is less than 15000 then it should be 12% of the sum of all the values in the salary structure except HRA
For Calculation of EMPLOYER ESIC CONTRIBUTION (C) Component: it should be 3.25% on Total Pay Component (if it only less than 21000)
Step 1- Creating Pay Components (Manage Organization, Pay and Job Structures)
Step 2- Creating pay component Group and assign all required Pay component in the same (Manage Organization, Pay and Job Structures)
Step 3-Creating Business Rule as per different Pay Grade (Configure Business Rules)
Keep the other pay components as required in the rule and if you don’t want to do on pay grade, you can take other field filters too in the same rule.
Note-For Less than 15000 Rs Salary ,HRA pay component is deducted on calculation too.
Step 4-Assign the Business Rule in Manage Business Configuration
Repeat the same steps for ESI Calculation too
Business Rule for ESI Calculation
Assign the same in Manage Business Configuration.
Step 5- Testing
Conclusion-PF and ESI calculation scenario as per Indian employee policy.PF calculation under Rs15000 Salary ,12 % deducted except HRA amount and Remaining all 12 % above Rs 15000 salary.ESI Calculation will be 3.25% for those employees whose CTC will be less than Rs 21000.
Different Pay Components based on different Pay Grade.
Thanks for your time.