Statutory Compliance

Statutory compliance in JobNext covers the configuration and management of mandatory employer and employee contributions as required by labor laws. This includes Provident Fund (PF), Employee State Insurance (ESI), and other statutory deductions that must be calculated accurately during each payroll run.

HR masters configuration page showing designations, departments, cadres, and statutory setup options for PF, ESI, and other deductions — HR Masters configuration for statutory deduction setup including designations, departments, and compliance parameters

Key Statutory Components

Component	Description	Responsibility
Provident Fund (PF)	Retirement savings contribution calculated as a percentage of basic salary	Both employer and employee contribute
ESI	Employee State Insurance for medical benefits, applicable below a salary threshold	Both employer and employee contribute
Professional Tax	State-level tax on employment income, varies by state	Employee-only deduction
Labour Welfare Fund	Contribution to state labour welfare funds	Varies by state

Configuration via Welfare Heads

Statutory contributions are configured through the Welfare (Salary Structure) system. When creating a welfare head for a statutory contribution:

Create the welfare head in Staff > Payroll > Welfare
Mark it as a Statutory Contribution
Assign the expense ledger for the employer's share
Assign a separate liability ledger for the contribution payable
Configure the calculation procedure for the correct percentage or formula

Employer vs. Employee Contributions

Statutory contributions marked as such require two ledger accounts: one for the expense (employer share) and one for the liability (amount payable to the statutory authority). Regular welfare items that appear on the payslip only need the expense ledger.

PF Configuration Example

Aspect	Employee Share	Employer Share
Rate	12% of Basic Salary	12% of Basic Salary
Payslip Display	Shown as deduction	Shown as employer contribution (or hidden)
Accounting	Deducted from net pay	Debited to PF Expense, credited to PF Payable

Remittance

After payroll processing, statutory amounts must be remitted to the appropriate government authorities within the prescribed deadlines. JobNext tracks the liability amounts, and remittance is processed through the Finance module to clear the statutory payable ledgers.

Compliance Deadlines

Statutory remittances have strict government-mandated deadlines. PF contributions must typically be deposited by the 15th of the following month. Late remittances may attract penalties and interest. Set up reminders to ensure timely payments.