Assistant Manager-hrd
Nirav Gandhi
+1 Other

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Hi Guru's,
I have a scenario , where an employee joins on 21st of may and his basic salary (prorated for 11 days ) is 11238.00 .
the pf settings here is minimum of 12% of is his basic and 12% of eligible basis (6500).
now since his basic is more than 6500 his pf contribution should be rs 780. but the system is calculating the basis on prorata basis (basis 6500 * no of days in the month) and coming with an amount approx rs 278. but since his basic is more than 6500 the client says it should rs 780.
How do I answer this issue.
Kindly help as this my first project.
Regards
vibin

Hi, Vibin, Guru’s can help you if you give answers to following questions. 1. In which software/system pf setting showing wrong?. 2. are you a payroll software provider? Arun J.
No i am an SAP HR CONSULTANT so when i am configuring in SAP its reflecting so, so legally i just want to know how the prorate on above question works. Regards vibin
Hi Arun,
I am not linking my question to SAP or some other software, in general as per PF act if employee joins mid of the month how his PF will calculate. can you suggest me so that i can put the same concept in my software.
Just in general term how PF is prorate if emp joins mid of the month,
Regards
Vibin

Dear Vibin,
For Ex
my monthly basic is 10000 as per your question where an employee joins on 21st of may and his basic salary (prorated for 11 days )
My Basic is 3548 ( 10000*11/31) and PF will be calculated on 3548*12/100= 425.76

Hi Nirav,
As per your statement it should calculate exactly as you said but as my issue
for basic pay of 11238.00, PF is 275 is it legally correct as system is calculating 780/31=25 ( 25*11=275) is it legally correct.
Regards
vibin

Dear Vibin, it is incorrect..........................................check ur system and get knowledge from SAP programer.
Hi, Vibin
Case 1 considering monthly PF below 6500
Suppose employees basic is Rs.5000 for a month (30 days)
If he has worked only for 15 days his basic will come to 2500 for that particular month.
Now his PF contribution will come to Rs.300 for that particular month.
Case 2 considering monthly PF above 6500
Suppose employees basic is Rs.18000 for a month (30 days)
If he has worked only for 15 days his basic will come to 9000 for that particular month.
Now his PF contribution will come to Rs.1080 for that particular month.
(If employer has restricted the contribution for PF upto 6500 then pf contribution will come 780)
The above monthly days shown are just example. if clients company calculates salary on 26 days then PF amount will differ.
Arun J.

Hi Nirva, you mean to say 275 is correct as per legal or it should be 780 as his basic is more than 6500.
Hi Arun,
The above concept for LOP or unpaid day even for me works fine but the problem is only with MID JOINEE and MID Termination employee as PF is cal on no of days*30= and amount though emp BASIC is more than 6500.
Is that correct or even if emp joins or relive mid of the month and if his baic is more than 6500 flat 780 shd deduct.

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