Suresh Ramalingam
Legal, Hr & Compliance
Das Debraj
+1 Other

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The ceiling of 6500/- is there.
The Basic wages are more than 6500/-. The employer's contn. is restricted to 6500/- if wages are full month. What will happen if wages are for shorter period due to short in attendance. Will the 6500/- ceiling be raised?

Dear Rajan,
The LOP in the salary is going to be proportionate to the attended days, if the LOP affects the net employee contribution for the PF, then the employer contribution is also proportionate to the salary administered.
Suresh Ramalingam

For more clarity I submit the following:-
Basic Wages 10,000/- (Basic Pay)
If Pay for full monthl -
Basic Wages : 10,000/- ( Ceiling 6500/- uncovered 3500/-)
Emplyee PF 12% : Rs. 780/-
Employer PF 13.61% : 885.00 (ceiling of Rs 6500/-)
If Pay for 15 day -
Basic Wages : 3250/- (half of ceiling 6500/- uncovered 1750/-)
Employee PF : Rs. 390/-
Employer PF 13.61% : 442/-
Basic Wages : 5000/- (half of 10000, ceiling is 6500/-)
Employee PF : Rs. 600/-
Employer PF 13.61% : 681/-
Which one is correct, if we talk of proportionate reduction in Pay.
I have logically divided the Basic Wages into two parts. In case of LOP the reduction in Basic Wages will be application to both parts - up to the ceiling of 6500/- and the other part that is beyond 6500/- i.e. 3500/-.
Please suggest.
Rajan Kumar

Dear Mr. Rajan Kumar,
I think you are confused or I cant understand what are you saying.
Why are you bother about LOP?? If you company's policy is that employer or employee will contrubute in pf on more than 6500 basic salary (ceiling limit).
And you are calculating wrong 13.61% share. It should also limit to 6500 & keep in mind about pension account limit.
If any employee having 10,000 (basic + da) salary you have to deduct on 6500 as follows.
Employee : 780
Employer : 780 excluding 1.61% which will be calculated separately.
I hope this will resolve your doubt. If not yet please post or email me at
Prashant Patil

But in case of absent for some days both Basic +D.A and EPF salary will be proportionately reduced.
If Basic +D.A is Rs.20000/- and EPF considered on max. cap i.e Rs.15000/- for full month's attendance, and payable days reduced to 15 days due to absent then Basic + D.A will be Rs.10000/-.
In that case on which amount EPF need to deduct, on Rs.10000/- or on Rs.7500/- (proportionate on max. cap Rs.15000/-) ?

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