Setup Statutory Components

Configure statutory salary components like EPF, ESI, LWF, PT, and SB to ensure compliance with regulations.

Employee Provident Fund (EPF)

EPF is a retirement benefits scheme where both employer and employee contribute a fixed percentage.

Guidelines for EPF

Rules and contributions applicable to EPF compliance.

Employers must contribute 12% of basic salary , and employees must also contribute 12% .
Employees can voluntarily contribute more than 12% , but the employer is not obligated to match the extra amount.
EPF contributions are tax-exempt under Section 80C of the Income Tax Act .
The employer’s contribution is divided into 8.33% towards EPS and 3.67% towards EPF .
Employees can withdraw their EPF balance under specific conditions like retirement, unemployment, or emergencies .

Setup EPF

Steps to enable EPF in payroll settings.

Navigate to Configuration Page: From the left sidebar, select Configuration to redirect to the configuration page.
Open Payroll Tab: Click the Payroll tab to proceed.
Open Statutory Component Tab: Click the Statutory Component tab and select EPF from the sidebar.
Enter your EPF Number: You can find this in the registration letter which you received from the Employee Provident Fund Organisation (EPFO).
Include Employer’s Contribution in CTC: Select whether you want to include the employer’s contribution as a part of employees’ CTC.
Restrict Overriding of PF Contribution Rate: If you want to restrict the overriding of the PF contribution rate at the employee level, check the respective option.
Restrict Employer’s Contribution Calculation: Select whether you want to restrict employer’s contribution calculation to ₹15,000 of Basic Pay. If you enable this option, employer’s contribution will be calculated only for ₹15,000, even if the Basic Pay exceeds that amount.
Include Other PF Components if Basic Pay is Less than ₹15,000: If the Basic Pay is less than ₹15,000, other PF components such as Travelling Allowance and Telephone Allowance may be included in the PF wage computation to bring the EPF to ₹15,000. To enable this, check the option Consider all applicable PF components if PF wage is less than ₹15,000 after Loss of Pay.
Enable ABRY Scheme: Check the box next to Eligible for ABRY Scheme , if your organisation is registered for the ABRY scheme.
Select Contribution Type: Check the appropriate Contribution Type: Only Employee or Both Employee and Employer.
Enable EPF: Click the Enable button to enable EPF.

Employee State Insurance (ESI)

ESI provides medical and disability benefits to employees earning below a specific wage threshold.

Guidelines for ESI

Details on ESI contribution and eligibility.

Employers contribute 3.25% and employees contribute 0.75% of gross salary.
ESI covers employees earning up to ₹21,000 per month ( ₹25,000 for persons with disabilities ).
The scheme provides medical, maternity, disability, and dependent benefits .
ESI contributions are mandatory for establishments with 10 or more employees ( 20 in some states ).
Employees can avail of benefits from ESI hospitals and dispensaries across India.

Setup ESI

Steps to enable ESI in payroll settings.

Navigate to Configuration Page: From the left sidebar, select Configuration to redirect to the configuration page.
Open Payroll Tab: Click the Payroll tab to proceed.
Open Statutory Component Tab: Click the Statutory Component tab and select ESI from the sidebar.
Enter your ESI Number: You can find this in the registration letter provided by the Employee State Insurance Corporation (ESIC).
Include Employer’s Contribution in CTC: Select whether you want to include the employer’s contribution as part of employees’ CTC.
Enable ESI: Click the Enable button to enable ESI.

Labour Welfare Fund (LWF)

LWF is a state-mandated fund to support employee welfare initiatives.

Guidelines for LWF

Rules and contributions applicable to LWF compliance.

LWF is applicable based on state-specific rules .
Both employers and employees contribute to the fund, typically on a monthly, quarterly, or half-yearly basis .
LWF contributions vary by state and are used for education, health, and social security benefits for employees.
Employers must register under the respective State Labour Welfare Board to comply with LWF regulations.

Setup LWF

Steps to enable LWF in payroll settings.

Navigate to Configuration Page: From the left sidebar, select Configuration to redirect to the configuration page.
Open Payroll Tab: Click the Payroll tab to proceed.
Open Statutory Component Tab: Click the Statutory Component tab and select LWF from the sidebar.
Enable LWF: Click the Enable button to activate LWF deductions.

Professional Tax (PT)

PT is a state-levied tax on professionals based on salary slabs.

Guidelines for PT

Tax slab details and deduction criteria.

Rates vary by state, with monthly or annual deductions.
Applicable to salaried employees, professionals, and business owners in certain states.
Deduction amounts depend on salary slabs set by the respective state government.
Employers are responsible for deducting PT from employee salaries and remitting it to the state.
Failure to comply with PT regulations may result in penalties and interest charges.

Setup PT

Steps to enable PT in payroll settings.

Navigate to Configuration Page: From the left sidebar, select Configuration to redirect to the configuration page.
Open Payroll Tab: Click the Payroll tab to proceed.
Open Statutory Component Tab: Click the Statutory Component tab and select PT from the sidebar.
Click Edit PT Button: In the PT section, click Edit PT to open the Professional Tax update form, enter PT number and other fields.
Add More Slabs (If Needed): Click + Add Slab to define additional tax brackets.
Update PT Settings: Click the Update button to save changes.

Statutory Bonus (SB)

SB is a legally mandated bonus for eligible employees based on company profitability.

Guidelines for SB

Bonus eligibility and percentage details.

Employees earning below a specified limit are entitled to an annual bonus of 8.33% to 20% of salary.
The minimum bonus is 8.33% of the salary , even if the company makes no profit.
The maximum bonus payable is 20% of the salary , depending on company profitability.
Only employees who have worked for at least 30 days in a financial year are eligible.
Bonus payments must be made within eight months from the end of the financial year.

Setup SB

Steps to enable SB in payroll settings.

Navigate to Configuration Page: From the left sidebar, select Configuration to redirect to the configuration page.
Open Payroll Tab: Click the Payroll tab to proceed.
Open Statutory Component Tab: Click the Statutory Component tab and select SB from the sidebar.
Click Enable Statutory Bonus Button: In the SB section, click Enable Statutory to enable statutory bonus
Select the Payment Frequency: Choose between Monthly or Yearly payment frequency.
Enter the Percentage of Bonus: Set a value between 8.33% and 20%.
Set Minimum Wage for Each State: For the states your organisation operates in, you can set the minimum wage by clicking + Add Minimum Wage.
Click Save: Once all details are configured, click the Save button to apply the changes.

Name	Description
EPF	Retirement benefit where both employer and employee contribute a fixed percentage.
ESI	Health and disability insurance for employees under a wage threshold.
LWF	State-mandated welfare fund for employees.
PT	State-levied tax on professionals based on salary.
SB	Mandatory annual bonus for eligible employees.