I am employed as an HR Officer in a CBSE school. I want to know the salary split for EPF, ESI and tax calculation for salary purpose. Kindly do needful.
From India, Salem
From India, Salem
For salary splitting in a CBSE school for EPF (Employee Provident Fund), ESI (Employee State Insurance), and tax calculation, you typically follow these guidelines:
### 1. Basic Salary:
- **Basic Salary**: This forms the core of the salary structure and is usually 40-50% of the gross salary. It is essential for EPF contributions and is taxable.
### 2. Allowances:
- **House Rent Allowance (HRA)**: If applicable, this is typically 40-50% of the basic salary. HRA can be partially exempt from tax under certain conditions.
- **Conveyance Allowance**: This is provided to meet travel expenses between home and work. It is exempt up to a certain limit.
- **Medical Allowance**: Reimbursement for medical expenses, usually taxable unless supported by actual bills.
- **Special Allowance**: Additional component for the balance of the gross salary after basic and HRA. It is fully taxable.
### 3. Deductions:
- **EPF (Employee Provident Fund)**: Both employer and employee contribute 12% of the basic salary plus dearness allowance (if any) towards EPF. The employer's contribution includes EPF, Employees' Pension Scheme (EPS), and Employee Deposit Linked Insurance Scheme (EDLI).
- **ESI (Employee State Insurance)**: Applicable if the gross salary is below Rs. 21,000 per month. The employer contributes 4.75% and the employee contributes 1.75% of the gross salary towards ESI.
- **Professional Tax**: State-specific tax levied by some states on employment. The amount varies by state.
- **Income Tax**: Deducted as per income tax slabs after considering deductions under sections like 80C, 80D, etc.
### Example Salary Structure:
Assuming a gross salary of Rs. 30,000 per month:
- **Basic Salary**: Rs. 12,000 (40% of gross salary)
- **HRA**: Rs. 6,000 (20% of gross salary)
- **Conveyance Allowance**: Rs. 1,600
- **Medical Allowance**: Rs. 1,000
- **Special Allowance**: Rs. 9,400 (remaining balance)
#### Deductions:
- **EPF (Employee Contribution)**: 12% of Rs. 12,000 = Rs. 1,440
- **EPF (Employer Contribution)**: 12% of Rs. 12,000 + administrative charges
- **ESI (Employee Contribution)**: 1.75% of gross salary = Rs. 525
- **Professional Tax**: Varies by state (e.g., Rs. 200 per month in some states)
- **Income Tax**: Deducted as per applicable tax slabs
#### Net Salary Calculation:
- Gross Salary - (EPF + ESI + Professional Tax + Income Tax) = Net Salary
### Compliance:
Ensure compliance with CBSE guidelines and local labor laws regarding salary structure, deductions, and contributions to EPF, ESI, etc. Consult with a tax consultant or HR expert to customize the salary structure based on specific school policies and statutory requirements.
From India, Guwahati
1### 1. Basic Salary:
- **Basic Salary**: This forms the core of the salary structure and is usually 40-50% of the gross salary. It is essential for EPF contributions and is taxable.
### 2. Allowances:
- **House Rent Allowance (HRA)**: If applicable, this is typically 40-50% of the basic salary. HRA can be partially exempt from tax under certain conditions.
- **Conveyance Allowance**: This is provided to meet travel expenses between home and work. It is exempt up to a certain limit.
- **Medical Allowance**: Reimbursement for medical expenses, usually taxable unless supported by actual bills.
- **Special Allowance**: Additional component for the balance of the gross salary after basic and HRA. It is fully taxable.
### 3. Deductions:
- **EPF (Employee Provident Fund)**: Both employer and employee contribute 12% of the basic salary plus dearness allowance (if any) towards EPF. The employer's contribution includes EPF, Employees' Pension Scheme (EPS), and Employee Deposit Linked Insurance Scheme (EDLI).
- **ESI (Employee State Insurance)**: Applicable if the gross salary is below Rs. 21,000 per month. The employer contributes 4.75% and the employee contributes 1.75% of the gross salary towards ESI.
- **Professional Tax**: State-specific tax levied by some states on employment. The amount varies by state.
- **Income Tax**: Deducted as per income tax slabs after considering deductions under sections like 80C, 80D, etc.
### Example Salary Structure:
Assuming a gross salary of Rs. 30,000 per month:
- **Basic Salary**: Rs. 12,000 (40% of gross salary)
- **HRA**: Rs. 6,000 (20% of gross salary)
- **Conveyance Allowance**: Rs. 1,600
- **Medical Allowance**: Rs. 1,000
- **Special Allowance**: Rs. 9,400 (remaining balance)
#### Deductions:
- **EPF (Employee Contribution)**: 12% of Rs. 12,000 = Rs. 1,440
- **EPF (Employer Contribution)**: 12% of Rs. 12,000 + administrative charges
- **ESI (Employee Contribution)**: 1.75% of gross salary = Rs. 525
- **Professional Tax**: Varies by state (e.g., Rs. 200 per month in some states)
- **Income Tax**: Deducted as per applicable tax slabs
#### Net Salary Calculation:
- Gross Salary - (EPF + ESI + Professional Tax + Income Tax) = Net Salary
### Compliance:
Ensure compliance with CBSE guidelines and local labor laws regarding salary structure, deductions, and contributions to EPF, ESI, etc. Consult with a tax consultant or HR expert to customize the salary structure based on specific school policies and statutory requirements.
From India, Guwahati
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