Employees’ State Insurance Scheme
ESI is one of the most popular integrated need-based social insurance schemes among employees that protects their interest in uncertain events, such as temporary or permanent physical disability, sickness, maternity, injury during employment,and more.
Employees Provident Fund
the Employees Provident Fund (EPF) is also a contributory fund in which both the employee and employer contribute amount. EPF is a compulsory and contributory fund for the Indian organizations under “The Employees’ Provident Fund and Miscellaneous Provisions Act 1952”.
Employee And Employer Contributions For PF Deduction
For EFP, both the employee and the employer contribute equal amount, which is 12% of the salary of the employee. However, the employee contributions may differ. Employees can contribute more than 12% of their salary voluntarily. However, in such a case, the employer is not bound to match the extra contribution of the employee.
For PF contribution, the salary comprises of components such as: basic wages, DA, conveyance allowance and special allowance
For the PF deduction, the maximum limit of salary of the employee is Rs 15,000 per month. This means that even if the employee’s salary is above Rs 15,000, the employer is liable to contribute only on Rs 15,000 that is Rs 1,800.
The statutory compliance for PF contribution has some less known facts associated with it. The PF is divided into EPF and EPS (Employee pension Scheme) contributions. The employees’ contribution goes straight to EPF whereas from employer’s contribution, the 8.33% goes to EPS subject to Rs 1,250 a month and the rest goes to EPF. The payroll software providers take care about your ESI and PF deductions rules automatically.
Need Our Help?
ForosAdo offers a wide range of financial products and services to individuals and business owners. By seeking our sound financial information, we believe you will be better able to identify your goals and make sound decisions, to help you reach these goals.