What is the percentage of gratuity deduction in India?

Answer 1

The PF contribution is 12% of Basic salary from both employee and employer. For the calculation the maximum limit of Basic is Rs 6500/-. It means even if the employee's basic salary is above Rs 6500/- the employer is liable to contribute only on Rs 6500/-, that is Rs 780.

However if an employee so desires he may voluntarily contribute more than 12%. Apart from it an employer also has to pay some administration charges. I explain you the various accounts of PF challan.

A/c No 1: PF contribution Account

A/c No 2: PF Admin account

A/c No 10: EPS account

A/c No 21: EDLIS account

A/c No 22: EDLIS admin account

PF admin charge = Employer has to pay 1.1 % of basic

EDLIS: Employer has to pay 0.5% of basic

EDLIS admin charge:Employer has to pay 0.01% of basic

Total additional percentage employer has to pay: 1.61% of basic

So employer has actually to pay 13.61 % of Basic and employee has to pay only 12% of basic.

Employees complete 12% goes to PF account while employer contributions' 8.33% goes to Pension fund and 3.67% goes to PF fund.

Answer 2

1.75% of gross salary from employee side and 4.75% of the same from employer's side.

Answer 3

Gratuity is calculated in India on the following formula :-

15 days x no.of years worked x last drawn salary

Divided by 26 days