Hi, I read many posts in citeHR. But still I had one thing bothering me.
I have 20 employees only in my organization.
Scenario One:
Basic = 5000, HRA = 2500, Other Allowances = 500, Total Net take home is 8000-200 (professional tax)=7800, So Is PF mandatory for this scenario?
Is ESI mandatory for this scenario?
(pl. remember employee strength is 20 only)
Scenario Two
Basic = 6500, HRA = 3250, Other Allowances = 100, Total Net take home is 9850-200 (professional tax)=9650, So Is PF mandatory for this scenario?
Is ESI mandatory for this scenario?
(pl. remember employee strength is 20 only)
Scenario Three
Basic = 6600, HRA = 3300, Other Allowances = 600, Total Net take home is 10500-200 (professional tax)=10300, So Is PF mandatory for this scenario?
Is ESI mandatory for this scenario?
(pl. remember employee strength is 20 only)
Thanks in advance.
From India, Bangalore
5I have 20 employees only in my organization.
Scenario One:
Basic = 5000, HRA = 2500, Other Allowances = 500, Total Net take home is 8000-200 (professional tax)=7800, So Is PF mandatory for this scenario?
Is ESI mandatory for this scenario?
(pl. remember employee strength is 20 only)
Scenario Two
Basic = 6500, HRA = 3250, Other Allowances = 100, Total Net take home is 9850-200 (professional tax)=9650, So Is PF mandatory for this scenario?
Is ESI mandatory for this scenario?
(pl. remember employee strength is 20 only)
Scenario Three
Basic = 6600, HRA = 3300, Other Allowances = 600, Total Net take home is 10500-200 (professional tax)=10300, So Is PF mandatory for this scenario?
Is ESI mandatory for this scenario?
(pl. remember employee strength is 20 only)
Thanks in advance.
From India, Bangalore
Hi Gova.MCA,
There is one fundamental aspect in PF & ESI registrations as below.
1.Registration Applicability - Employer:
* ESI eligibility will come only at a strength of twenty employees who's salary is less than 15,000 PM, irrespective of total head count of company.
* PF is a mandatory when the company reaches a head count of 20 employees, irrespective of the employee salary. But companies can opt the PF voluntarily even at less than 20 employee strength.
2. Option/Eligibility to employees:
* ESI:Its compulsion to Employees who earn less than 15,000PM (Applicable only if they are working with a company as specified above for ESI eligibility)
* PF: compulsory for employees, who's basic is less than 6500PM, But is a optional for employee who's basic is => 6500PM,.irrespective of their total monthly salary.
Here below is the answers for your specific scenarios.
1. Scenario 1: yes, Both PF & ESI is compulsory
2. Scenario 2: YES, Both PF & ESI is compulsory, But Employees are free to opt out/Opt in for PF as their basic is more than 6500, BUT They should defiantly take up the ESI.
3. Scenario 3: Same as scenario 2
I would like to make a small correction in the PT specified in the scenarios,
1. Salary > 15000 then PT deduction is RS.200
2. Salary >10000 but <15000 then PT deduction is Rs.150
3. Salary < 10000 ------PT will not be applicable at all
Hope, The above explanation will give you the required insights for your query.
From India, Bangalore
There is one fundamental aspect in PF & ESI registrations as below.
1.Registration Applicability - Employer:
* ESI eligibility will come only at a strength of twenty employees who's salary is less than 15,000 PM, irrespective of total head count of company.
* PF is a mandatory when the company reaches a head count of 20 employees, irrespective of the employee salary. But companies can opt the PF voluntarily even at less than 20 employee strength.
2. Option/Eligibility to employees:
* ESI:Its compulsion to Employees who earn less than 15,000PM (Applicable only if they are working with a company as specified above for ESI eligibility)
* PF: compulsory for employees, who's basic is less than 6500PM, But is a optional for employee who's basic is => 6500PM,.irrespective of their total monthly salary.
Here below is the answers for your specific scenarios.
1. Scenario 1: yes, Both PF & ESI is compulsory
2. Scenario 2: YES, Both PF & ESI is compulsory, But Employees are free to opt out/Opt in for PF as their basic is more than 6500, BUT They should defiantly take up the ESI.
3. Scenario 3: Same as scenario 2
I would like to make a small correction in the PT specified in the scenarios,
1. Salary > 15000 then PT deduction is RS.200
2. Salary >10000 but <15000 then PT deduction is Rs.150
3. Salary < 10000 ------PT will not be applicable at all
Hope, The above explanation will give you the required insights for your query.
From India, Bangalore
Dear Gova.mca,
Answer to your all scenario is yes for both PF as well ESI. However, you can exclude the employees from PF who are drawing Basic plus DA component more than Rs. 6500/- p.m. if they are not a member of PF before joining you and they give you in writing that they do not wish to contribute towards PF.
From India, Mumbai
Answer to your all scenario is yes for both PF as well ESI. However, you can exclude the employees from PF who are drawing Basic plus DA component more than Rs. 6500/- p.m. if they are not a member of PF before joining you and they give you in writing that they do not wish to contribute towards PF.
From India, Mumbai
hai Aisha Sulthana
A small correction
I would like to make a small correction in A.P. PT specified in the scenarios,
1. Salary above 15001 to 20,000 then PT deduction is RS.150 PM
2. Salary below 15000 the PT is NIL
3. Salary above 20001 then PT deduction is Rs.200 PM
1.Registration Applicability For ESI - Employer:
10 or more with Aid of power
20 or more without Aid of power
From India, Mumbai
A small correction
I would like to make a small correction in A.P. PT specified in the scenarios,
1. Salary above 15001 to 20,000 then PT deduction is RS.150 PM
2. Salary below 15000 the PT is NIL
3. Salary above 20001 then PT deduction is Rs.200 PM
1.Registration Applicability For ESI - Employer:
10 or more with Aid of power
20 or more without Aid of power
From India, Mumbai
Aisha Sulthana,
A big thanks for clearing very basics. So I can draw below conclusions for my understandings.
ESI Eligibility:
Condition 1 :Minimum and mandatory head count = 20 (even if more than 20 also doesn't matter but least must be 20)
Condition 2 : Take home salary < 15000
So, If condition 1 & condition 2 are passed, Then ESI is MUST & MANDATORY!!!
I would like to split your lines on PF
Aisha K : PF is a mandatory when the company reaches a head count of 20 employees, irrespective of the employee salary. But companies can opt the PF voluntarily even at less than 20 employee strength.
Govardhan : PF is a mandatory when the company reaches a head count of 20 employees, >>>>> Till here it is clear that (Condition 1 :Minimum and mandatory head count = 20 (even if more than 20 also doesn't matter but least must be 20)) >>> Yes, However I agree that, If employer is interested, PF can be opted though head count is less than 20 also (But from my perspective, I don't want to take headache of PF - atleast till I reach a head count of 20. So, I don't bother about this!!! But I'm glad that you pointed out this as well).
Govardhan: irrespective of the employee salary >>>>> Are you referring to registration only here from employer perspective? Because later you are telling that, If basic is < 6500, Then PF mandatory. (but highlighted in red says that irrespective of employee salary)....
OK. let me give you a scenario based on your lines:
Employee strength = 20
Employee by name x basic is 6499 (<6500) >>>> So, conclusion based on your lines is >>>> PF is mandatory
Employee strength = 20
Employee by name y basic is 6500 (not < 6500) >>>> So, conclusion based on your lines is >>>> PF is mandatory (case 1 for identification)
But again you pointed that, If basic is > 6500 >>>> So, It is optional for an employee to opt or not.(case 2 for identification)
So, Case 1 and Case 2 are conflicting!!!
Please clarify!
And one more thing, head count = 20, all employees are getting basic more than 6500 (for eg. all employees basic is 6600) and some how I convinced them to opt out for PF for which all employees agree on that. So, In this scenario, No need from the employer end to contribut to PF and EPS????
Regards,
Govardhan.
From India, Bangalore
A big thanks for clearing very basics. So I can draw below conclusions for my understandings.
ESI Eligibility:
Condition 1 :Minimum and mandatory head count = 20 (even if more than 20 also doesn't matter but least must be 20)
Condition 2 : Take home salary < 15000
So, If condition 1 & condition 2 are passed, Then ESI is MUST & MANDATORY!!!
I would like to split your lines on PF
Aisha K : PF is a mandatory when the company reaches a head count of 20 employees, irrespective of the employee salary. But companies can opt the PF voluntarily even at less than 20 employee strength.
Govardhan : PF is a mandatory when the company reaches a head count of 20 employees, >>>>> Till here it is clear that (Condition 1 :Minimum and mandatory head count = 20 (even if more than 20 also doesn't matter but least must be 20)) >>> Yes, However I agree that, If employer is interested, PF can be opted though head count is less than 20 also (But from my perspective, I don't want to take headache of PF - atleast till I reach a head count of 20. So, I don't bother about this!!! But I'm glad that you pointed out this as well).
Govardhan: irrespective of the employee salary >>>>> Are you referring to registration only here from employer perspective? Because later you are telling that, If basic is < 6500, Then PF mandatory. (but highlighted in red says that irrespective of employee salary)....
OK. let me give you a scenario based on your lines:
Employee strength = 20
Employee by name x basic is 6499 (<6500) >>>> So, conclusion based on your lines is >>>> PF is mandatory
Employee strength = 20
Employee by name y basic is 6500 (not < 6500) >>>> So, conclusion based on your lines is >>>> PF is mandatory (case 1 for identification)
But again you pointed that, If basic is > 6500 >>>> So, It is optional for an employee to opt or not.(case 2 for identification)
So, Case 1 and Case 2 are conflicting!!!
Please clarify!
And one more thing, head count = 20, all employees are getting basic more than 6500 (for eg. all employees basic is 6600) and some how I convinced them to opt out for PF for which all employees agree on that. So, In this scenario, No need from the employer end to contribut to PF and EPS????
Regards,
Govardhan.
From India, Bangalore
An updated PT rules:
Salary and wage earners. Such persons whose monthly salaries or wages,
(a) exceed rupees 5,000 but do not exceed rupees 10,000 175 per month
(b) exceed rupees 10,000 2500 per annum, to be paid in the following manner: -
a) rupees two hundred per month except for the month of February;
b) rupees three hundred for the month ofFebruary
From India, Mumbai
Salary and wage earners. Such persons whose monthly salaries or wages,
(a) exceed rupees 5,000 but do not exceed rupees 10,000 175 per month
(b) exceed rupees 10,000 2500 per annum, to be paid in the following manner: -
a) rupees two hundred per month except for the month of February;
b) rupees three hundred for the month ofFebruary
From India, Mumbai
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