MOHANSHARMA Started The Discussion:
I am new to this forum and seeking your advise for the first time: it is very urgent and I have to give feedback to my management immediately
OUR COMPANY IS PAYING PF CONTIBUTION ON GROSS PAY INSTEAD OF BASIC+DA+ VDA SINCE LONG TIME.
NOW THE PROBLEM IS WITH PF CONTRIBUTION ON LEAVE ENCASHMENT.
OUR ACCOUNTS SAY WE SHOULD ONLY CALCULATE ON BASIC AND DA ON THE LEAVE ENCASHMENT AND PAY PF CONTRIBUTION OF 12%
BUT MY HR COLLEAGUE SAYS WE SHOULD CALCULATE 12% ON THE ENTIRE AMOUNT OF LEAVE ENCASHMENT
CAN ANY OF THE EXPERT IN LAW EDUCATE ME ON THE FOLLOWING
WHAT DOES PF COMMISSIONARATE MEAN ABOUT: PF CONTRIBUTION ON LEAVE ENCASHMENT.
very urgent reply is solicited. calculation procedure is also apreciated
-MOHAN SHARMA :?:
Dear Mohan Sharma,
Welcome to the forum..
PF contribution on Leave encashment is payable only on Basic and Da
as being done on salary as per act.
Considering gross for PF deductions is a vouluntary act.Similar is the leave encashmnent status.
As per p.f. Act contribution is subjected to wages of the employee's
as per the definition wages means (Basic + DA + Food Concession)
If we calculate the pf contribution on leave encashment. Kindly let me know on which head in payroll we have to put the amount of leave encashment.
1. Should we distribute that amount in Basic + DA + Food Concession?
2. Should we put that amount as Arrear?
3. Should we put that amount on a new head "leave encashment"?
If we follow 1. The amount of earning, increase in that particular month, what should our clarification of this increase
If we follow 2. What should our clarification of this arrear.
If we follow 3. Keeping in view the definition of wages as per pf department (Basic + DA + Food Concession) can we deduct p.f. on this head
Kindly clear my confusion
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