PRESENTATION

ON
EMPLOYEES PROVIDENT FUND
GRATUITY
ESI
By..
RAJIV MAJHI
PG(HR)
QUESTIONS:
Whom can I nominate as my nominee?
What is the % at which Provident Fund is deducted from my salary?
At what rate the employer contributes to Provident Fund?
Is it also possible to check the EPF Account balance online?
Can I contribute over and above the mandatory 12%, as voluntary PF?
Can an employee claim Gratuity even before completion of 5 years?
How much gratuity amount is exempted from income tax?
Can a company refuse to pay gratuity due to financial Loss to employees?
What is the ceiling of gratuity amount payment?
What are the rates of contribution in ESI?
Who is exempted from payment of contribution
How are the contribution collected?

INTRODUCTION:
PROVIDENT FUND
Meaning:
History:

Employees Provident Funds & Miscellaneous Provisions
Act, 1952. Presently, the following three schemes are in
operation under the Acts.

1.Employees Provident Fund Scheme (EPF), 1952
2.Employees Deposit Linked Insurance Scheme (EDLIS), 1976
3.Employees Pension Scheme (EPS),1995
CALCULATION OF PF:

Table below gives the rates of contribution of EPF, EPS, EDLI,
Admin charges in India.
SCHEME NAME EMPLOYEES CONTRIBUTION EMPLOYERS CONTRIBUTION
Employee provident fund 12% 3.67%
Employees Pension scheme 0 8.33%
Employees Deposit linked insurance 0 0.5%
EPF Administrative charges 0 1.1%
EDLIS Administrative charges 0 0.01%
METHOD:1
If company consider total basic salary above the limit fixed 6500 for PF calculation. Employer
has decided to contribute on total basic salary which is 12 % on 7500.00 equal to 900.00. EPS
Share is fixed to 541. Balance (900-541) goes to EPF account 359.00. You may be thinking that,
what about 3.67%?,
CONTRIBUTION CALCULATION AMOUNT
EPF Employees share 7500 x 12% 900
EPS Employer share 6500 x 8.33% 541
EPF employer share 7500 x 12% (-) 541 359
EDLI charges 7500 x 0.5% 38
EPF Admin charges 7500 x 1.1% 83
EDLI Admin charges 7500 x 0.01% 0.75 ( Round up to Rs 1/-
METHOD:2
Some companies follows the below method in which employee share is
calculated on 7500/- and employer share is calculated on up limit Rs
6500/-
CONTRIBUTION CALCULATION AMOUNT
EPF Employees share 7500 x 12% 900
EPS Employer share 6500 x 8.33% 541
EPF employer share 6500 x 3.67% 239
EDLI charges 6500 x 0.5% 33
EPF Admin charges 6500 x 1.1% 72
EDLI Admin charges 6500 x 0.01%
0.65 ( Round up to Rs 1/-
)
METHOD:3
Some companies calculate both employer and employee shares on
6500/- in spite of higher basic salary than 6500.
CONTRIBUTION CALCULATION AMOUNT
EPF Employees share 6500 x 12% 780
EPS Employer share 6500 x 8.33% 541
EPF employer share 6500 x 3.67% 239
EDLI charges 6500 x 0.5% 33
EPF Admin charges 6500 x 1.1% 72
EDLI Admin charges 6500 x 0.01% 0.65 ( Round up to Rs 1/-)
METHOD:4
Let us calculate the contribution of an employee who is getting a basic
salary of Rs 3500.

Contribution Towards Calculation Amount
EPF Employees share 3500 x 12% 420
EPS Employer share 3500 x 8.33% 292
EPF employer share 3500 x 3.67% 128
EDLI charges 3500 x 0.5% 18
EPF Admin charges 3500 x 1.1% 39
EDLI Admin charges 3500 x 0.01% 0.35 ( round up to Rs 1/-)
EXAMPLE
BENEFITS:
Provident fund benefit:
Pension benefits:
Withdrawal benefits:
Death benefits:
Tax benefits:

INTRODUCTION
Gratuity means gifts or service often in return of favors
and services.
In the present context, it means, a sum of money paid to
an employee at the end of employment.
Gratuity in case of retirement, superannuation or death
helps family to adjust in a new situation in which income
ceases partially or completely.
Gratuity Schemes, serves as an important tool of social
security.
HISTORICAL BACKGROUND
3
rd
June,1971 introduced the
ordinance, wherein a scheme for
payment of gratuity was enacted
Govt. Of Keralas Legislation
for payment of Gratuity
Ordinance replaced by West Bengal
Employees payment of compulsory
Gratuity Act,1971
Central Legislation on gratuity
-Discussed-
Labour Ministers Conference
held at New Delhi 1971
Accordingly the Payment of Gratuity Bill was
introduced in Parliament
Payment of Gratuity
Gratuity Amount payable under Payment of Gratuity Act
enhanced from Rs.3.5 lakhs to Rs. 10 lakhs.


As per Payment of Gratuity (Amendment) Act,2010,
the amount of gratuity payable to an employee shall not
exceed Ten Lakh Rupees.
BENEFITS OF GRATUITY
Retirement Benefit:
Death Benefit:
Medical Benefit:
Cash Benefit:
CALCULATION OF GRATUITY
Number of yrs of service x Last salary drawn
(Basic+D.A) X 15/26
Where,
Salary= Basic+DA
15= 15 days salary
26= No. of working days in a month

EXAMPLE:
If an employee leave company after 10 years and his
last Basic + Dearness allowance is 10000 then his gratuity
will be paid as per following formula.

(10000/26)*15* 10


INTRODUCTION
Meaning
History
Contribution
Managed by ESIC

BENEFITS OF ESI
Medical Benefits
Cash Benefits
CALCULATION OF ESI
ESI : Employee State Insurance is calculated at 1.75% on
the gross salary of the employees whose salary is below Rs.
10000/-per month (w.e.f 2008) and Employer contributes
4.75%
on the gross salary of the employee and the aggregate 1.75%
+ 4.75% is remitted to the ESI Department
EXAMPLE:
Find out the ESI for the basic salary of Rs 9000?
Step 1:
Enter the salary, For e.g. 9000
Step 2:
Employee contributes 1.75% for ESI. Now compute as shown here, ESI =
9000*(1.75/100) = 158
Step 3:
Employer contributes 4.75% for ESI. Compute as shown here, ESI =
9000*(4.75/100) = 428
TOTAL=586

DIFFERENCES:
PROVIDENT FUND GRATUITY ESI
Contribution made by both
the party
Contribution only from
employer
Contribution made by both
the party
Company must have 20
or more employees
Company must have 10 or
more employees
Company must registered
From the first day the
employee is covered
under the act
Gratuity is paid only after
completion of 5 years
The employees registered
under this scheme are
entitled to medical
treatment
Transferable Non-transferable Transferable