Hello Seniors,
I hope my question here will be resolved. I am working in a company where there is no proper process in place for salary payments, and I would like to regularize it. There are approximately 80 unskilled employees, and their work is quite critical. I need to set up their insurance, ESI, and PF benefits.
I would like to understand how to proceed with this. What is the process for implementing these benefits? How should I proceed? Please assist me with this. Your guidance will help me streamline the process.
Thank you in advance.
From India, Hyderabad
I hope my question here will be resolved. I am working in a company where there is no proper process in place for salary payments, and I would like to regularize it. There are approximately 80 unskilled employees, and their work is quite critical. I need to set up their insurance, ESI, and PF benefits.
I would like to understand how to proceed with this. What is the process for implementing these benefits? How should I proceed? Please assist me with this. Your guidance will help me streamline the process.
Thank you in advance.
From India, Hyderabad
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Hi,
Please maintain attendance properly in form 22 (muster roll). Ensure you have set proper records of every employee including joining, resigning, overtime, half-day, etc., and bifurcate as per the categories. You can maintain all of this even on MS-Excel. Then, regarding the legal aspect, you can apply to the ESI and PF office in your area, and they will guide you on how to proceed.
I hope this information will be helpful.
Regards,
Rajeev Dixit
(09901436213)
From India, Bangalore
113Please maintain attendance properly in form 22 (muster roll). Ensure you have set proper records of every employee including joining, resigning, overtime, half-day, etc., and bifurcate as per the categories. You can maintain all of this even on MS-Excel. Then, regarding the legal aspect, you can apply to the ESI and PF office in your area, and they will guide you on how to proceed.
I hope this information will be helpful.
Regards,
Rajeev Dixit
(09901436213)
From India, Bangalore
I have started doing all this as a process to get things done. I maintain every record on MS-EXCEL, and I also collect filled ESI and PF forms from the former employees. I also need to know about Workmen's Compensation Insurance Policy, how it should be done, and how it can be included in the salary. As I mentioned earlier, these employees who are with the company have critical jobs where sometimes they even need to take risks.
I hope I can get an answer for this.
Thanks in Advance, Kumara
From India, Hyderabad
I hope I can get an answer for this.
Thanks in Advance, Kumara
From India, Hyderabad
Hi Kumaraswamy,
As per statute, both PF and ESI are applicable to your organization. You have to apply to the local PF authority and ESI office for separate code numbers for PF and ESI. You may visit the respective websites of EPF and ESI where you can view the application forms and can take print out for applying code numbers. For PF, both employees and employers will contribute at 12% of basic and DA. For ESI, the employer will contribute at 4.75% and the employee will contribute at 1.75% of the PF salary. For employees earning a wage at Rs 50/- per day, the employer will pay the full contribution, i.e., 6.5%. Books are also available for both PF and ESI.
If you are based in Kolkata, you can contact me at 9903862144 as I am a consultant on the subject under discussion.
Regards,
Kalyan Mitra
From India, Calcutta
As per statute, both PF and ESI are applicable to your organization. You have to apply to the local PF authority and ESI office for separate code numbers for PF and ESI. You may visit the respective websites of EPF and ESI where you can view the application forms and can take print out for applying code numbers. For PF, both employees and employers will contribute at 12% of basic and DA. For ESI, the employer will contribute at 4.75% and the employee will contribute at 1.75% of the PF salary. For employees earning a wage at Rs 50/- per day, the employer will pay the full contribution, i.e., 6.5%. Books are also available for both PF and ESI.
If you are based in Kolkata, you can contact me at 9903862144 as I am a consultant on the subject under discussion.
Regards,
Kalyan Mitra
From India, Calcutta
Dear Mr. Mitra,
I like your short and simple reply, but I didn't get the meaning of PF Salary which you have mentioned in the 4th line of the email. Please let me know, is this different from regular salary? Or do you mean to say the salary after deduction of PF?
Also, could you explain how to calculate ESI and PF? Please provide an example for better understanding.
Thank you.
From India, Jamnagar
I like your short and simple reply, but I didn't get the meaning of PF Salary which you have mentioned in the 4th line of the email. Please let me know, is this different from regular salary? Or do you mean to say the salary after deduction of PF?
Also, could you explain how to calculate ESI and PF? Please provide an example for better understanding.
Thank you.
From India, Jamnagar
Dear Mitra,
I didn't really understand it, and I may still need a few more clarifications. Can you provide an example? For instance, if I have to pay a basic salary of 5000 and 200 DA on a daily basis, which totals to 6000, and the overall amount is 11,000, how would I calculate the PF and ESI?
Thanks in advance.
From India, Hyderabad
I didn't really understand it, and I may still need a few more clarifications. Can you provide an example? For instance, if I have to pay a basic salary of 5000 and 200 DA on a daily basis, which totals to 6000, and the overall amount is 11,000, how would I calculate the PF and ESI?
Thanks in advance.
From India, Hyderabad
Dear Kumara Swamy,
DA is not Daily Allowance; it means Dearness Allowance. You can't pay basic 5000 & DA 6000. Generally, DA will be quite lesser than Basic. If the total salary is 11000, then you can fix both Basic & DA to 6500, HRA, and other allowances to 5500. You can even increase Basic & DA to 7000 and reduce other allowances.
PF will be calculated at 12% only on Basic + DA and not on the Gross. The same contribution from the employer too. Here you can limit the max of PF to 6500 if the basic & DA exceed 6500.
ESI will be calculated on Gross; it is 1.75% of the Employee contribution and 4.75% of the Employer contribution; the total is 6.5%. If the gross salary exceeds 10000, then those employees will not be eligible for ESI.
For further details, you can contact me at 9343753361. Please tell me which city you are from and the location.
From India, Bangalore
DA is not Daily Allowance; it means Dearness Allowance. You can't pay basic 5000 & DA 6000. Generally, DA will be quite lesser than Basic. If the total salary is 11000, then you can fix both Basic & DA to 6500, HRA, and other allowances to 5500. You can even increase Basic & DA to 7000 and reduce other allowances.
PF will be calculated at 12% only on Basic + DA and not on the Gross. The same contribution from the employer too. Here you can limit the max of PF to 6500 if the basic & DA exceed 6500.
ESI will be calculated on Gross; it is 1.75% of the Employee contribution and 4.75% of the Employer contribution; the total is 6.5%. If the gross salary exceeds 10000, then those employees will not be eligible for ESI.
For further details, you can contact me at 9343753361. Please tell me which city you are from and the location.
From India, Bangalore
Hi all,
Please do not confuse the rules of PF and ESI.
As per the PF Act, the PF is to be deducted only on Basic and up to a ceiling of Rs. 6,500.00 of basic pay, Dearness Allowance, HRA, and Conveyance Allowance on which PF is not to be deducted. Please refer to the Wage definition of EPF Act. EPF: Employee share is 12%, and Employer share is a total of 13.46%, which is inclusive of EPF Employer share Plus 1% of administrative charges, 0.5% of Linked insurance, and 0.01% of other heads.
Here Basic wage is that which is fixed by the state governments by way of gazette Notifications as per the Minimum Wages Act and as well as the dearness allowance fixed for every 6 months once and released by way of gazette notifications for awareness of the industry and traders. You can get a copy of the same from your nearby or regional commissioner of labor office.
As per ESI, the ceiling is Rs. 10,000.00, which consists of (Basic and Dearness Allowance), and the HRA and Conveyance or Traveling allowance are exempted from the deduction of ESI. Please refer to the case laws given under ESI Acts. For ESI, the employee share is 1.75%, and the employer share is 4.75% on the above wages. The wage is well defined in the ESI Act; please purchase a bare act of ESI for your immediate reference.
In regard to the insurance part, ESI will look after all fatal accidents and death cases of the employees, and moreover, if you are more careful towards your employees, go for a group insurance scheme which will take care of all the medical and hospital expenses of the injured at work.
Mohan Rao Manager HR
From India, Visakhapatnam
Please do not confuse the rules of PF and ESI.
As per the PF Act, the PF is to be deducted only on Basic and up to a ceiling of Rs. 6,500.00 of basic pay, Dearness Allowance, HRA, and Conveyance Allowance on which PF is not to be deducted. Please refer to the Wage definition of EPF Act. EPF: Employee share is 12%, and Employer share is a total of 13.46%, which is inclusive of EPF Employer share Plus 1% of administrative charges, 0.5% of Linked insurance, and 0.01% of other heads.
Here Basic wage is that which is fixed by the state governments by way of gazette Notifications as per the Minimum Wages Act and as well as the dearness allowance fixed for every 6 months once and released by way of gazette notifications for awareness of the industry and traders. You can get a copy of the same from your nearby or regional commissioner of labor office.
As per ESI, the ceiling is Rs. 10,000.00, which consists of (Basic and Dearness Allowance), and the HRA and Conveyance or Traveling allowance are exempted from the deduction of ESI. Please refer to the case laws given under ESI Acts. For ESI, the employee share is 1.75%, and the employer share is 4.75% on the above wages. The wage is well defined in the ESI Act; please purchase a bare act of ESI for your immediate reference.
In regard to the insurance part, ESI will look after all fatal accidents and death cases of the employees, and moreover, if you are more careful towards your employees, go for a group insurance scheme which will take care of all the medical and hospital expenses of the injured at work.
Mohan Rao Manager HR
From India, Visakhapatnam
Dear Mr. Kumaraswamy,
Process for applying:-
ESI- You have to address your application to The Officer, Employees' State Insurance Corporation, of your city with the following documents requesting for your establishment to be covered under ESI Act:
1. Form - 01
2. Trade License
3. Certificate of Incorporation
4. PAN Card
5. Owner's Residential Address Proof
6. Rent Receipt
7. Bank Statement
8. Attendance Register
9. Salary Register
10. Memorandum & Articles of Association
For PF, you have to write to The Regional Provident Fund Commissioner, Regional Provident Fund of your city with the following documents:
1. Form for allotment of Business Number
2. Document to obtain code number
3. Extension of PF coverage voluntarily
4. Consent signature of staff
5. All relevant supporting documents:
a) Copy of trade license
b) Company PAN
c) Central Sales Tax Registration
d) Certificate of Incorporation
e) Form 3
6. Audited Balance Sheets
7. Profession Tax Certificate
8. Income Tax PAN Card
Insurance - you need to talk to Agents of LIC/State Bank of India/ICICI Prudential and take quotations.
This process should get you started. In case they want any further support, the concerned officers would let you know.
All the best,
Dwipna
From India, Calcutta
Process for applying:-
ESI- You have to address your application to The Officer, Employees' State Insurance Corporation, of your city with the following documents requesting for your establishment to be covered under ESI Act:
1. Form - 01
2. Trade License
3. Certificate of Incorporation
4. PAN Card
5. Owner's Residential Address Proof
6. Rent Receipt
7. Bank Statement
8. Attendance Register
9. Salary Register
10. Memorandum & Articles of Association
For PF, you have to write to The Regional Provident Fund Commissioner, Regional Provident Fund of your city with the following documents:
1. Form for allotment of Business Number
2. Document to obtain code number
3. Extension of PF coverage voluntarily
4. Consent signature of staff
5. All relevant supporting documents:
a) Copy of trade license
b) Company PAN
c) Central Sales Tax Registration
d) Certificate of Incorporation
e) Form 3
6. Audited Balance Sheets
7. Profession Tax Certificate
8. Income Tax PAN Card
Insurance - you need to talk to Agents of LIC/State Bank of India/ICICI Prudential and take quotations.
This process should get you started. In case they want any further support, the concerned officers would let you know.
All the best,
Dwipna
From India, Calcutta
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