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Provident Fund & ESIC Deduction in ERPNext

Hello Team,

I have PF & ESIC deduction clarification:

Current system:
PF Calculation - ERPNext deduct straight forward 12% of basic salary irrespective of PF CAP as per Indian Govt rule. (Provided if we mention 12% as PF in deduction section)
ESIC Calculation - Same goes in case of ESIC also, system deduct 1.75% of gross salary straight way. (Provided if we mention 1.75% of gross salary as ESIC in deduction section)

How it should be:
PF Calculation - As per Indian Govt, PF CAP on basic salary is INR 15,000/. Means, if employee basic salary > INR 15,000 then PF deducation should not be more than INR 1800/Month. System calculate PF wrongly when employee takes any LWP.

ESIC Calculation - As per India Govt, ESIC Cap on gross salary is INR 15,000/-. For example - If employee salary is INR 15,000 and he/she earned INR 7000/ as incentives in that month then total ESIC deduction should be 1.75% of INR 15,001 and rest INR 6,999/- should be ESIC free.


IN ERPNext, system does not calculate PF or ESIC amount automatically. In Salary structure, you have to mention the exact amount. So, you can consider those cases, and enter the correct amount. And for LWP consideration, you can set that as well, whether it is depends on LWP or not.

Example by a case:
In salary structure, we set basic salary- 15000 & PF - 1800.
Reduce Deduction for Leave Without Pay (LWP) for PF & basic salary - Checked.

In a month of Oct 2014, employee salary slips hold below records:
Working days - 23
LWP - 2
Payment days - 21

Now, since “Reduce Deduction for Leave Without Pay (LWP) for PF & basic salary is Checked”, value should be:
Basic salary: 14608
PF: 1753

**But PF Is coming 1643.48. When manually we enter 1753, system don’t take it. **
**System take the manual entry when “Reduce Deduction for Leave Without Pay (LWP)” is unchecked.

Pls suggest, if i’m missing something :slight_smile:



If you solve esi & pf related issue pls help me out


Hi Sunil
Hope you will be in good,

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