EPF and ESI

EPF

Applicable on Every establishment which is engaged in any one or more of the business employing 20 or more people. The establishment to which this Act applies shall continue to be governed by this Act, even if the number of employees falls below 20 at a later date.

As per the rules, in EPF, employee whose 'pay' is more than Rs. 15,000 per month at the time of joining, is not eligible and is called non-eligible employee. Employees drawing less than Rs 15000 per month have to mandatorily become members of the EPF. However, an employee who is drawing 'pay' above prescribed limit (at present Rs 15,000) can become a member with permission of Assistant PF Commissioner, if he and his employer agree.

The contribution paid by the employer is 12% of basic wages plus dearness allowance plus retaining allowance. An equal contribution is payable by the employee also. In the case of establishments which employ less than 20 employees or meet certain other conditions, as per the EPFO rules, the contribution rate for both employee and the employer is limited to 10 percent.

Out of employer's contribution, 8.33% will be diverted to Employees' Pension Scheme, but it is calculated on Rs 15,000. So, for every employee with basic pay equal to Rs 15,000 or more, the diversion is Rs 1,250 each month into EPS.  The balance will be retained in the EPF scheme.

EPF reduce women employees' contribution to 8% for first three years of their employment against existing rate of 12% or 10% with no change in employers' contribution.

Due Dates

15^th of Next month

Annual Return by 25^th Apr

ESIC

Sec 2(12) Non–seasonal Factories using power in and Employing ten (10) or More people.
Non–seasonal and non-power using factories and establishments employing twenty(20) or more people.
Amount of Contribution
1. Employees’ Contribution – 1.75% of the Wages
2. Employers’ Contribution – 4.75% of the Wages
TOTAL 6.5 % of the Wage

Mandatory ceiling for people less than 21 thousand salary.

Due Dates

21^st of Next Month

Semi-annual return to be filed by 11^th May and 11^th Nov

Any individual working in the organization, whether temporary, under probation or permanent, with or without a contract, will be categorized as an employee.

Trainees shall be considered for the purpose of PF, ESI, PT ; until and unless they are Apprentices

Unpaid Interns have nothing to be paid hence nothing to be deducted

Paid Interns ( who undergo the internship in the middle of their curriculum ) need not be considered for PT, ESI or PT