Calculate statutory benefits under Indian labour laws including PF, ESI, Gratuity, Bonus, Retrenchment Compensation, Notice Pay, and Leave Encashment with precise formulas
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Calculate statutory benefits under Indian labour laws including PF (Provident Fund), ESI (Employee State Insurance), Gratuity, Bonus, Retrenchment Compensation, Notice Pay, and Leave Encashment with precise formulas, wage ceilings, and eligibility thresholds.
Eligibility: Establishments with 20+ employees
Wage Ceiling: Rs. 15,000/month (Basic + DA)
Employee Contribution:
If (Basic + DA) <= Rs. 15,000:
Employee PF = (Basic + DA) x 12%
If (Basic + DA) > Rs. 15,000:
Employee PF = Rs. 15,000 x 12% = Rs. 1,800/month
(Unless employer voluntarily contributes on actual higher wages)
Employer Contribution (12% split):
EPF (Employee Provident Fund): (Basic + DA) x 3.67% -> Goes to employee's PF account
EPS (Employee Pension Scheme): (Basic + DA) x 8.33% (capped at Rs. 1,250) -> Goes to pension fund
If (Basic + DA) <= Rs. 15,000:
EPF = (Basic + DA) x 3.67%
EPS = (Basic + DA) x 8.33% (capped at Rs. 1,250)
Total Employer Contribution = (Basic + DA) x 12%
If (Basic + DA) > Rs. 15,000:
EPF = Rs. 15,000 x 3.67% = Rs. 550.50
EPS = Rs. 1,250 (capped)
Total = Rs. 1,800 (Rs. 550.50 + Rs. 1,250 rounded)
Accumulated Balance (with interest):
Interest Rate: 8.1% per annum (FY 2023-24), compounded annually
Formula: P x [(1 + r/100)^n]
Where P = Principal (annual contributions), r = 8.1%, n = years
Example: Rs. 3,600/month x 12 months = Rs. 43,200/year
After 5 years: approx Rs. 2,55,000
Withdrawal Rules:
Eligibility: Wage <= Rs. 21,000/month, establishments with 10+ employees
Employee Contribution: 0.75% of gross wages Employer Contribution: 3.25% of gross wages
Gross Wages = Basic + DA + HRA + Other Allowances (excludes OT, bonus > ceiling)
If Gross Wages <= Rs. 21,000:
Employee ESI = Gross Wages x 0.75%
Employer ESI = Gross Wages x 3.25%
Total ESI = Gross Wages x 4%
If Gross Wages > Rs. 21,000:
NOT COVERED under ESI Act
Example:
Gross Wages: Rs. 18,000/month
Employee ESI: Rs. 18,000 x 0.75% = Rs. 135/month
Employer ESI: Rs. 18,000 x 3.25% = Rs. 585/month
Total: Rs. 720/month
ESI Benefits:
Eligibility: 5 years continuous service (reduced to 240 days for death/disablement)
Formula:
Gratuity = (Last Drawn Salary x 15 days x Years of Service) / 26
Where:
- Last Drawn Salary = Basic + DA (per month)
- 26 = Working days per month (for monthly wage earners)
- Years of Service = Completed years (if > 6 months in last year, count as 1 year)
Maximum Cap: Rs. 20,00,000
Example 1: Standard Calculation
Last Drawn Salary: Rs. 30,000/month
Service Period: 8 years 3 months (< 6 months, so count as 8 years)
Daily Wage: Rs. 30,000 / 26 = Rs. 1,153.85
Gratuity: Rs. 1,153.85 x 15 x 8 = Rs. 1,38,462
Example 2: Partial Year Rounding
Service: 7 years 8 months (> 6 months, count as 8 years)
Last Drawn Salary: Rs. 25,000
Daily Wage: Rs. 25,000 / 26 = Rs. 961.54
Gratuity: Rs. 961.54 x 15 x 8 = Rs. 1,15,385
Example 3: Cap Applied
Service: 35 years
Last Drawn Salary: Rs. 80,000/month
Gratuity (without cap): Rs. 80,000 / 26 x 15 x 35 = Rs. 1,61,53,846
Gratuity (with cap): Rs. 20,00,000 (capped)
Tax Treatment:
Eligibility:
Wage Ceiling for Calculation:
Formula:
Minimum Statutory Bonus: 8.33% of wages (or Rs. 100, whichever higher)
Maximum Bonus: 20% of wages
Bonus = Wages x 8.33% (minimum)
OR Wages x (Profit-based %) if higher (but capped at 20%)
Example 1: Wage < Rs. 7,000
Monthly Wage: Rs. 6,000
Annual Bonus: Rs. 6,000 x 12 months x 8.33% = Rs. 5,997.60 (minimum)
Example 2: Wage > Rs. 7,000 (Ceiling Applied)
Monthly Wage: Rs. 15,000
Bonus Calculation Wage: Rs. 7,000 (capped for calculation)
Annual Bonus: Rs. 7,000 x 12 x 8.33% = Rs. 6,996.80 (minimum)
If employer wants to pay on actual wages (voluntary):
Rs. 15,000 x 12 x 8.33% = Rs. 14,994
Proportionate Bonus (if worked < 12 months):
Worked Days: 200 days in a year
Proportionate Bonus: (Rs. 7,000 x 12 x 8.33%) x (200/365) = Rs. 3,833
Eligibility: Continuous service of 240 days (1 year) or more
Formula:
Retrenchment Compensation = 15 days Average Pay x Years of Continuous Service
Where:
- Average Pay = Average wages for last 12 months
- 15 days = Statutory entitlement
- Years = Completed years (if > 6 months in fractional year, count as 1 year)
No Maximum Cap (unlike gratuity - Rs. 20 lakhs cap)
Example 1: Standard Calculation
Average Monthly Pay: Rs. 22,000
Service: 6 years 8 months (> 6 months, count as 7 years)
Daily Average Pay: Rs. 22,000 / 26 = Rs. 846.15
Retrenchment Compensation: Rs. 846.15 x 15 x 7 = Rs. 88,846.15
Example 2: Long Service
Average Monthly Pay: Rs. 40,000
Service: 25 years
Daily Average Pay: Rs. 40,000 / 26 = Rs. 1,538.46
Retrenchment Compensation: Rs. 1,538.46 x 15 x 25 = Rs. 5,76,923
(No cap - full amount payable)
Section 25F Conditions (ALL mandatory for valid retrenchment):
If Section 25F not complied: Retrenchment is ILLEGAL -> Worker entitled to reinstatement + back wages
Standard Notice Period: 1 month (as per Industrial Employment Act, varies by Standing Orders)
Formula:
If termination without notice:
Notice Pay = 1 month gross salary
If notice given but employee relieved earlier:
Notice Pay = (Notice period - Days worked) x Daily wage
Example 1: Immediate Termination
Gross Salary: Rs. 28,000/month
Notice Pay: Rs. 28,000 (full 1 month)
Example 2: Partial Notice Period
Gross Salary: Rs. 30,000/month
Notice Period: 30 days
Employee relieved on Day 10 (employer wants immediate exit)
Notice Pay: (30 - 10) days x (Rs. 30,000 / 26) = 20 x Rs. 1,153.85 = Rs. 23,077
Earned Leave Accumulation: 1 day per 20 days worked (varies by Standing Orders)
Formula:
Leave Encashment = Earned Leave Balance x Daily Wage
Where:
- Daily Wage = Monthly Salary / 26 (working days)
- Earned Leave Balance = Accumulated earned leave (not availed)
Example 1: Full Year Leave Balance
Monthly Salary: Rs. 25,000
Earned Leave: 20 days (accumulated)
Daily Wage: Rs. 25,000 / 26 = Rs. 961.54
Leave Encashment: 20 x Rs. 961.54 = Rs. 19,230.77
Example 2: Multi-Year Accumulation
Service: 5 years
Earned Leave Per Year: 15 days
Availed Leave: 10 days/year
Balance: (15 - 10) x 5 = 25 days
Monthly Salary: Rs. 35,000
Daily Wage: Rs. 35,000 / 26 = Rs. 1,346.15
Leave Encashment: 25 x Rs. 1,346.15 = Rs. 33,653.85
Tax Treatment:
**Employee Details**:
- Name: [Employee Name]
- Service Period: [Start Date] to [End Date] = [X years Y months]
- Last Drawn Salary: Rs. [Amount]/month
- Basic Salary: Rs. [Amount]
- DA (Dearness Allowance): Rs. [Amount]
- HRA: Rs. [Amount]
- Other Allowances: Rs. [Amount]
- Gross Salary: Rs. [Total]
## Statutory Benefits Calculation Summary
### PF (Provident Fund)
- **Contribution Basis**: Basic + DA = Rs. [Amount]
- **Employee Contribution**: Rs. [Amount] x 12% x [Months] = Rs. [Total]
- **Employer Contribution**: Rs. [Amount] x 12% x [Months] = Rs. [Total]
- **Accumulated Balance** (with 8.1% interest): Rs. [Amount]
- **Withdrawable Amount**: Rs. [Amount]
### ESI (Employee State Insurance)
- **Eligibility**: Gross Wages [<= / >] Rs. 21,000 -> [COVERED / NOT COVERED]
### Gratuity
- **Eligibility**: [X years Y months] -> [ELIGIBLE / NOT ELIGIBLE] (5 years required)
- **If Eligible**: Gratuity = Rs. [Daily x 15 x Years] = Rs. [Amount]
- **Capped at**: Rs. 20,00,000 (if calculated amount higher)
### Bonus (If Applicable)
- **Eligibility**: Wage [<= / >] Rs. 21,000, Establishment [20+ / <20] employees
- **Minimum Bonus (8.33%)**: Rs. [Wage x 12 x 8.33%] = Rs. [Amount]
### Notice Pay (If Not Given)
- **Notice Pay**: Rs. [Monthly Salary] = Rs. [Amount]
### Leave Encashment
- **Earned Leave Balance**: [X days]
- **Leave Encashment**: Rs. [Daily x Days] = Rs. [Amount]
### Retrenchment Compensation (If Applicable)
- **Retrenchment Compensation**: Rs. [Daily x 15 x Years] = Rs. [Amount]
---
## TOTAL STATUTORY DUES
| Component | Amount (Rs.) |
|-----------|--------------|
| PF (Employee + Employer) | [Amount] |
| ESI (if applicable) | [Amount] |
| Gratuity | [Amount] |
| Bonus | [Amount] |
| Notice Pay | [Amount] |
| Leave Encashment | [Amount] |
| Retrenchment Compensation (if applicable) | [Amount] |
| **GRAND TOTAL** | **[Sum]** |
Version: 1.0 Last Updated: December 2025 Jurisdiction: India (PF Act 1952, ESI Act 1948, Gratuity Act 1972, Bonus Act 1965, ID Act 1947)