After viewing the very good efforts from your side I think
I should also contribute something.
Any organization having minimum 10 employees, PF
registration is must and less than that the company will go
for a volunteer registration.
PF (Provident Fund)can be calculated on 12% of Basic+DA.
for example: If Basic+DA=6500/-
Then 12% of 6500=780/- can be deducted
Both employer and employee contribute 12% for PF.
From 12% of employer's contribution 8.33% goes for EPS
(Employee Pension Scheme) & 3.67% goes for EPF (Empoyee
And the Basic+DA should not exceed standard basic
i.e.,6500/- per month for employer's contribution of 12%.
If it exceeds then the employer can take exemption on his
whole 12% contribution.But in some cases the companies opt
to contribute but the contribution should be restricted to
12% of 6500/- (standard basic) only.
But the employee contribution of 12% is based on actual
For example: If Basic+DA=7000/- (exceeds standard basic of
Then, Employer's 12% contribution is
calculated on 6500/- (standard basic)
& employee's 12% calculation is calculated on
7000/- (actual basic)
And ESI (Employee State Insurance)is deducted every month
for employees, whose gross salary is not more than 10,000/-
Employee's contribution=1.75% of gross salary
Employer's contribution=4.75/% of gross salary
PF IS CALCULATED ON BASIC SALARY.
ESI IS CALCULATED ON GROSS SALARY. IF GROSS SALARY IS
EXCEEDS Rs. 10000/-, THE PERSON IS NOT COMES UNDER ESI
SCHEME AND NO NEED TO PAY ESI. OTHERWISE EMPLOYER
CONTRIBUTE 1.25% AND EMPLOYEE CONTRIBUTE 4.75% ON TOTAL
PF is calculated on basic salary and it's 12% of basic.And
if basic is more than 6500 then also it is deducted 780 is
the maximum limit.
It's due to ceiling of 6500/-.
But in some firms 780/- is not limit there is deduction of
exact 12% of basic if my basic salary is 11500 then there
is deduction of 1380/- if an employee wants to deduct his
pf more than 780. he can do this.while basic is 11500,but
employer's contribution 8.33 % calculate on 6500.
And in PF there is contribution from emloyer also.
If my PF is deducted 780/-then Employer will also
contribute 780/-.But whole this 780 is not going to PF
account.Out of 12% of employer contribution 8.33% is
contributed for pension scheme and 3.67% for PF.
And ESIC is calculated on gross salary.
If gross salary is more then 10000/- then the employee is
not applicable for ESIC.ESIC is deducted as 1.75% of gross
salary of employee.In ESIC also there is Employer's
contribution and it is 4.75% of gross salary. but now esi
gross limit increase 10000 to 15000 so esi is calculated on
gross limit 15000.
PF calculate on Basic +DA, ( Limit 6500/- ) .There is
option if Basic and DA is 11000/- P.F. calculate 12% i.e.
1320/- but pension scheme calculate on Rs. 6500/- i.e.
maximum limit Rs. 541/-
ESIC on gross salary, limit 15000/-
If you cant understand please mail me for further details,
dont worry i will help you free of cost
( firstname.lastname@example.org )
1. what are the ledgers to be open for service tax
accounting & under which group in tally?
2. what is the journal entry to be pass when adjusting
input & output service tax at the end of the month?