How to Calculate PF and ESI with Example in 2018

Introduction

Calculating Provident Fund (PF) and Employees’ State Insurance (ESI) can be a complex process, especially for those who are unfamiliar with the process. This guide will provide an overview of how to calculate PF and ESI in 2018, as well as an example of how to calculate these two important contributions. By understanding the process of calculating PF and ESI, employers and employees can ensure that the correct contributions are made and that all applicable laws are followed.

How to Calculate PF and ESI with Example in 2018

PF (Provident Fund)

The Employees’ Provident Fund (EPF) is a retirement savings scheme for salaried employees in India. It is managed by the Employees’ Provident Fund Organisation (EPFO).

The employer and employee both contribute 12% of the employee’s basic salary and dearness allowance (DA) towards the EPF account. The employer’s contribution is deposited in the EPF account of the employee.

The employee’s contribution is deposited in the EPF account of the employee and the employer’s contribution is deposited in the EPF account of the employer.

The employee’s contribution is eligible for tax deduction under Section 80C of the Income Tax Act, 1961.

Example:

If an employee’s basic salary and DA is Rs. 10,000 per month, then the employer and employee will contribute 12% of Rs. 10,000 each, i.e. Rs. 1,200 each.

The employer’s contribution of Rs. 1,200 will be deposited in the EPF account of the employee and the employee’s contribution of Rs. 1,200 will be deposited in the EPF account of the employer.

ESI (Employees’ State Insurance)

The Employees’ State Insurance (ESI) is a social security scheme for salaried employees in India. It is managed by the Employees’ State Insurance Corporation (ESIC).

The employer and employee both contribute 4.75% of the employee’s basic salary and DA towards the ESI account. The employer’s contribution is deposited in the ESI account of the employee.

The employee’s contribution is deposited in the ESI account of the employee and the employer’s contribution is deposited in the ESI account of the employer.

The employee’s contribution is eligible for tax deduction under Section 80C of the Income Tax Act, 1961.

Example:

If an employee’s basic salary and DA is Rs. 10,000 per month, then the employer and employee will contribute 4.75% of Rs. 10,000 each, i.e. Rs. 475 each.

The employer’s contribution of Rs. 475 will be deposited in the ESI account of the employee and the employee’s contribution of Rs. 475 will be deposited in the ESI account of the employer.
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Employees whose monthly basic salary + DA is less than 15000 are eligible for employee provident fund scheme 1952 and employees whose monthly gross salary is less than 21000 Rs are eligible for employee state insurance scheme. Here you can know how to calculate PF and ESI with examples.

Download PF & ESI 2018 Calculation Excel Sheet

How to Calculate PF and ESI with Example

Difference Between PF & Pension

  • The provident fund account of every employee is divided into Two parts, they are PF account and pension account. The amount deposited in PF account can be withdrawn at any time after 2 months of leaving the job.
  • But the amount deposited in pension account is not withdrawable after 10 yrs of service of the employee. It will be paid as a monthly pension after 58 yrs of the employee. If your service is less than 10yrs then you can withdraw your total pension like PF amount. Once it crosses 10yrs then you can’t able to withdraw it.

How to Calculate PF with Example in 2018

PF Percentage 2018 (On basic + DA), PF Calculation Example For Basic Wage 14000 Rs
Employee Contribution a/c 1 12% 1680
Employer Contribution
PF a/c 1 3.67% 513.8
Pension a/c 10 8.33% 1166.2
PF admin Charges a/c 2 0.85% 119
EDLI Charges a/c 21 0.5% 70

The above account numbers 1,2,10,21,22 are present on PF challan, generally, employees don’t need to know about these, only employers should be aware of these EPF challan account numbers.

Also read: How to calculate PF for basic salary more than 15000 Rs

How to Calculate ESI with Example in 2018

ESIC eligibility salary limit

Gross salary of 21000 Rs or below

ESI contribution rate 2018

Employee ESI percentage 1.75%

Employer ESI percentage 4.75%

Also read: How to use ESIC card in private hospital

Example: If an employee gross salary is 2000 Rs then his or her ESI contributions will be like this

Employee ESI contribution 1.75% = 358.75

Employer ESI contribution 4.75% = 973.75

Total ESI contribution = 358.75+973.75= 1332.5 = 1332

Note: When the total ESIC amount is in decimals then the nearest value will be considered. You don’t need to worry about this because it will be calculated automatically when you file ESIC returns online at ESIC portal.

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How to Calculate PF and ESI with Example in 2018

Calculating Provident Fund (PF) and Employees’ State Insurance (ESI) can be a complicated process. It is important to understand the rules and regulations of both PF and ESI in order to calculate them correctly. This article will provide an overview of how to calculate PF and ESI with an example in 2018.

What is Provident Fund (PF)?

Provident Fund (PF) is a retirement savings scheme that is managed by the Employees’ Provident Fund Organisation (EPFO). It is a mandatory contribution made by both the employer and the employee. The employer contributes 12% of the employee’s basic salary and dearness allowance (DA) to the EPFO. The employee contributes an equal amount, making the total contribution 24%. This amount is deposited in the employee’s PF account.

What is Employees’ State Insurance (ESI)?

Employees’ State Insurance (ESI) is a social security scheme that provides medical and financial benefits to employees in case of illness, injury, or death. It is managed by the Employees’ State Insurance Corporation (ESIC). The employer contributes 4.75% of the employee’s basic salary and DA to the ESIC. The employee contributes 1.75%, making the total contribution 6.5%. This amount is deposited in the employee’s ESI account.

How to Calculate PF and ESI with Example in 2018

Let’s take an example of an employee with a basic salary of Rs. 10,000 and DA of Rs. 5,000. The employer’s contribution to the EPFO for PF will be 12% of (Rs. 10,000 + Rs. 5,000) = Rs. 1,700. The employee’s contribution to the EPFO for PF will be 12% of (Rs. 10,000 + Rs. 5,000) = Rs. 1,700. The total contribution to the EPFO for PF will be Rs. 3,400.

The employer’s contribution to the ESIC for ESI will be 4.75% of (Rs. 10,000 + Rs. 5,000) = Rs. 637.50. The employee’s contribution to the ESIC for ESI will be 1.75% of (Rs. 10,000 + Rs. 5,000) = Rs. 237.50. The total contribution to the ESIC for ESI will be Rs. 875.

Conclusion

Calculating PF and ESI can be a complicated process. It is important to understand the rules and regulations of both PF and ESI in order to calculate them correctly. This article has provided an overview of how to calculate PF and ESI with an example in 2018.

Jaspreet Singh Ghuman

Jaspreet Singh Ghuman

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