Clarity on Salary: PF, ESI, Gratuity and other! - pf contributions
CiteHRCiteHR
 
HOME RISE NEW TEAM →|
Home > Human Resource Section > Employee Compensation & Benefits

HR-Love Started The Discussion:

In the past I've found so many threads here. But I was caught by confusion. Some say PF doesn't apply for employee whose salary over 6500/-. But some attatchments contains PF for any employee.

So I decided to get clarity by asking report for these employees.

Employee A: Basic- 6000/-PM , has been working 4 years.
Employee B: Basic- 8000/-PM , has been working 4 years.
Employee C: Basic- 6000/-PM , has been working 6 years.
Employee D: Basic- 8000/-PM , has been working 6 years.

Explain with Employer's salary (Suppose his basic is 16000/-). I mean some said PF calculated from both Employee and Employer.
BTW, Who is employer? employer's employer?..
Please explain the solution of these employee's Salary Structure(PF,ESI,Gratuty...) of MONTHLY & YEARLY.

HR-Love -  Member Since: Sep 2012
Why my topic doesn’t appear on CITEHR home page? Hope I will get answer that can clarify my all doubts about Salary structure.

MANJUNATH G.K. -  Member Since: Apr 2009
Dear Friend,

usually Management restrict the PF contributions only to the ceiling of Rs. 6500/- though their basic wage (both basic + DA puttogether) is more than Rs. 6500/-.

Some Management pays PF contributions on the basic + DA without considering the ceiling.

This is for your kind information.

Regards,
G.K.Manjunath
Sr. Manager-HR

HR-Love -  Member Since: Sep 2012
Thankyou sir. If you have time, please give me report for employees I have written in the first post in both type of managements on PF and ESI, Gratuaty.

akshubm -  Member Since: Oct 2009
Dear friend,
PF is calculated on the basic+DA+HRA. both employee and employer (the company/firm on whose payroll an employee is enrolled) contribute equally. employee's contri is 12% and employer's is (12+1.6)%. this extra 1.6% is administrative charges to be paid by the employer only. when the contri of employee reaches more than Rs 6500, he is given an option whether to pay that extra amount or not and accordingly employer contributes. for ex. an employee's basic+DA+HRA is 60,000 Rs then its 12% wud be 7200 RS. now out of these he has to pay 6500 compulsorily and the remaining 700 Rs is optional/voluntary for him.

i hope this clears your doubt..

Regards,
Akansha Mahadule,
Executive HR.

veerendra_chauhan -  Member Since: Aug 2007
Dear,

As per ceiling of 6500/- any person whose wages Basic +Da are more than 6500/- will not attract PF deduction provided if they have not been the member of EPF scheme in the past.

Pls note that if a person has been once a member of (epf) employee provident fund , he will remain to be a member even if his wages exceeds the ceiling of 6500/-.

Hope this pacifes your curosity

VS Chauhan
8470002335

HR-Love -  Member Since: Sep 2012
Quote:
Originally Posted by veerendra_chauhan View Post
Dear,

As per ceiling of 6500/- any person whose wages Basic +Da are more than 6500/- will not attract PF deduction provided if they have not been the member of EPF scheme in the past.

Pls note that if a person has been once a member of (epf) employee provident fund , he will remain to be a member even if his wages exceeds the ceiling of 6500/-.

Hope this pacifes your curosity

VS Chauhan
8470002335
Only basic+DA, no HRA addition in that?

Could you do solve this for me?

1) 'A' a new employee gets a job with salary (Basic+DA) more than 6500/- (for example, say 10000). As he is a fresher for the employment, no way to have a EPF a/c in the past.

2) 'B', an old employees 1st salary (basic+da) less than 6500 (say 6000) and have a EPF a/c. But after getting promotion his salary (basic+da) more than 6500, for example say 10000.

If you have time to solve this for me, I can ask remaining doubts on this topic.

saswatabanerjee -  Member Since: Oct 2010
Hi

I dont think your original question is clear to people, which is probably the reason you have not been getting a response.
And using abusive language in posts is not going to get someone to respond.

In answer to your immediately previous post, if the person has an existing PF account, the company will have to continue PF for him. There is no exemption for such an employee. But as has been posted above, the legal requirement is to pay PF on Basic + DA to a maximum of Rs. 6500. If your salary is above 6500, then the PF is required to be paid assuming the salary is 6500. Nothing in the act prevents employer from voluntarily paying more.

HR-Love -  Member Since: Sep 2012
I don't think I did write any abusive text. If you think so, I can apologize. I don't edit the post, because if I did that, readers may think I did write some bad language. So, sorry for that.

After reading all of you answers, I got this idea. Please check and correct me if there any errors are.

1)PF is calculated 12% on the summation of BASIC+DA+HRA.

2)If this 12% shows more than 6500/- (not salary), it does matter to limit 6500/-. And the remaining is optional of employee.
Request: Give me an example to understand better.
For example, As per 'Akshubm's reply:
Quote:
If an employee's basic+DA+HRA is 60,000 Rs then its 12% wud be 7200 RS. now out of these he has to pay 6500 compulsorily and the remaining 700 Rs is optional/voluntary for him.
Then what's employer's contribution in this case, 6500/- or 7200/-?

3)And with above example: If employee's 1st ever job salary is 60,000, is there no PF a/c?

MANJUNATH G.K. -  Member Since: Apr 2009
Dear HR Love,

Regarding your questions:
1) A new employee whose wage is more than Rs. 10000/-. - Management can pay PF only on the ceiling amount of Rs. 6500/-. If Management wishes, they can pay on the entire amount of Rs. 10000/-.

2) Even in the second case also the sample principle applies. Till he crosses Rs. 6500/- Mangement has to pay contributions at the Rate of 12%. Once he crosses the ceiling amount of Rs. 6500/-, the Management can restrict its contribution to the ceiling amount of Rs. 6500/-.

Hope this clarifies your doub t on PF contributions.

G.K.Manjunath
Sr. Manager.




 
 
 
 





POSTING RULES OF CONDUCT
  • Do not post anything derogatory about any company or person.
  • Sharing articles from other websites should be done by posting a link to the original article.
  • To discuss sensitive issues create a pseudo/anonymous account.
  • Please avoid repeat posting your company profile - such accounts are removed automatically.

  • Found This Useful? +Vote Up This Via Google.  

    Why Vote? User validation is extremely important for good content to prosper.
    Disclaimer: This network and the advice provided in good faith by our members only facilitates as a direction towards the actions necessary. The advice should be validated by proper consultation with a certified professional. The network or the members providing advice cannot be held liable for any consequences, under any circumstances.



    3M Users, 100K+ Documents & 450K+ Discussions

    Share »


    Cite.Co helps people come together to solve each other's problems on all aspects of professional life.
    Community Support & Professional Insights. Login or Register.
    Email/Username    
    Password  

    About Us - Advertise - Contact Us - RSS   On Google+  
    All trademarks and copyrights held by respective owners. Member comments are owned by the poster.
    Privacy Policy | Disclaimer | Terms Of Service
    Facebook Page | Follow Us On Twitter | Linkedin Network