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      ESI/EPF Calculations & Payments

      Please consider this article regarding the registration of members, Contributions of members in ESI/EPF and ESI/EPF monthly challan payments.

      This article is in regard to the monthly ESI/EPF Calculations and returns filling.


      ESI/EPF Calculations:

      EPF and ESI Calculations is the monthly activity that should be done with the calculations of Salaries.


      ESIC - ESI is the medical benefit provided by the govt. to the employee getting a salary of Rs. 21000/- month or below. Under ESI the employee can get the medical facilities (Free checkups and medicines) from nearby ESIC Dispensaries located in the location of the employee. The employee can also consider one family member as a nominee under ESIC and claim the medical facility for the nominee. 

      1. Members with a salary of Rs. 21000/- month or below should be registered in ESI.
      2. Registration of members should be done within 10 days of joining. Exp. if a member joined on the 1st of April, he/she should be registered in ESI before the 10th of April.
      3. ESI will be calculated on gross salary. Exp. - If the CTC of a member is Rs. 20000/month. ESI will be calculated on Rs. 20000/-
      4. To register an employee in ESI and EPF. We need some basic details and documents of that member. 
      1. Full Name
      2. Father Name
      3. Date of Birth
      4. Marital Status
      5. Permanent Address
      6. Contact No.
      7. Correspondence address
      8. Bank details and the First page of the bank passbook of the member
      9. Nominee Name - Any in blood relation ( Mother, Father, Sibling, Spouse)
      10. Nominee Contact No.
      11. Date of Joining
      12. Aadhar Card copy of employee (Both Sides)
      13. Aadhar Card copy of nominee (Both Sides)

        

      ESIC Calculations

      Deductions of ESI will be 4% of gross salary. It is divided into 2 parts employer's and employee's contribution. The contribution percentage of both employer and employee is fixed.

      Exp: Gross Salary Rs.20000/-

      Employee contribution - 20000*0.75/100=150

      Employer contribution - 20000*3.25/100=650


      ESIC Challan: ESI challan is the monthly contribution by employer and employee which needs to be paid in favor of ESIC corporations.

      After monthly salaries are paid, the ESI challan has to be paid before the 15th of that month. Employer will be penalized if challan payment will be delayed after the 15th of the month.


      EPFO Calculations:

      1. Members with a salary of Rs. 15000/- month or below should be registered (mandatory) in EPF. If a member already has an active PF number, PF deduction is mandatory (no minimum or maximum salary bar).
      2. New members should be registered in EPF within 10 days of joining's, or else the company will be penalized for delayed registration.
      3. Calculation of EPF: PF contribution is divided into two parts. Employee Contribution and Employer's contribution both will equal i.e. 12%-12% of Basic Salary and a total of 24%

      Example: Gross Salary: 20000/month.

      Basic Salary=40% of Gross Salary

      Basic Salary 20000*40/100 = 8000

      Employee's Contribution = 8000*12/100 = 1200

      Employer's Contribution = 8000*12/100= 1200

      Total Contribution/deductions of both (1200+1200) = 2400/month


      If the basic salary of a member is more than Rs.15000/month, PF will be computed on Rs. 15000/- only which is the maximum ceiling for PF calculation.

      Exp. Gross Salary: 38000/month

      Basic Salary 38000*40/100 = 15200


      here basic salary is above 15000, but we will consider the basic salary Rs.15000 only and will calculate the PF on this amount only.

      Gross Salary: 38000/month 

      Basic Salary 15000

      Employer Contribution 15000*12/100 = 1800

      Employee Contribution 15000*12/100 = 1800

      Total Contribution (1800+1800) = 3600/month (This is the maximum amount we can deduct from an employee’s salary, the PF deduction amount will never exceed 1800+1800 = 3600 for both employer and employee’s 


      Monthly EPF Challan/Return: EPF return is the monthly contribution of employer and employee and it is mandatory to file the return on monthly basis.

      After monthly salaries are paid, the EPF challan has to be paid before the 15th of that month. Employer will be penalized if challan payment will be delayed after the 15th of the month.


      Payment of EPFO and ESIS Challan

      For EPF/ESI returns Challans needs to generate. Suresh Sir and the team handle the challan generation and employee registration work every month. We need to share the details with them at office@snsaccounts.com

      After calculations of salaries, an email should be sent to Suresh sir on the same day for the generation of challan. Data that is required to share:

      • List of members with Salary if PR is done.
      • List of new members who joined and should be added to ESI/EPF.
      • List of members who left the company and should be exited from ESI/EPF.

      How to make payment of EPF Challan:


      Open the EPF website/portal through the below link and add company credentials to it.

      https://unifiedportal-emp.epfindia.gov.in/epfo/


      • Once logged in select the payment option from the main menu and then select Payment (ECR).
      • After clicking on Payment ECR, a page will appear will all the paid and unpaid challans. 
      • The current challan will appear on the top with the details as challan no, amount, and month and year for which the challan needs to be paid. 
      • Click on the option Pay, on the right end side of the challan details. 
      • After that, we have to select our Bank i.e. HDFC corporate bank then add credentials 
      • This will take us directly to the page of our bank. We have to add the credentials of HDFC Enet.
      • Once credentials are added, ask the accounts team to generate an OTP which will be added to the bank portal before login.
      • Once logged in a page will appear on the bank portal to confirm the amount, we have to click on confirm and submit.
      • After that call/message Danish Sir for approval, only then the payment will be done. 


      How to make payment of ESI challan:


      Open the EPF website/portal through the below link. We can make the ESI challan payment without login in as well.

      https://www.esic.in/ESICInsurance1/ESICInsurancePortal/PortalLogin.aspx

      • Once the portal is open, scroll down and click on pay e challan from quick links.
      • Then Add the employer code then the captcha, and click on search.
      • It will show us the pending challan with challan no, amount, and the month for which it needs to be paid.
      • Click on challan no, After that select bank (State Bank of India)  and click on make payment. (Note: We make payments from HDFC Enet but here we choose SBI because on selecting HDFC corporate banking it shows an error and does not proceed)
      • A page will open where we will be asked for Net banking from SBI or other banks. Select other bank net banking.
      • Then a page will appear which will ask to select the bank, here click on HDFC bank and from the dropdown list select HDFC Bank (Corporate). Then it will take us to our HDFC bank portal where we have to add the credentials and ask an accounts team member for OTP.            
      • Once logged in a page will appear on the bank portal to confirm the amount, we have to click on confirm and submit.
      • After that call/message Danish Sir for approval, only then the payment will be done. 
                    

       

      Updated by Ritesh Kumar: 15 Dec 2022