Dear All,
I am working in Software MNC in Chennai, but our PF contribution state is at Maharashtra (Pune).
In our organization, the PF contribution is Rs.780 per month by Employee and Rs.780 per month by Employer irrespective of employee’s basic salary. The PF contribution is fixed Rs.780 for all employees irrespective of their basic pay.
But from the Employer’s contribution Rs. 541 per Month is going to Employer Pension and Rs.239 is contributed to PF.
Whenever any employee resigns and claims the PF, they get the amount based on the Rs.1,019 (780+239) only.
So, what about the Rs,541 contributed towards Employer Pension? How, when and where to get this money?
Please let me know, whether the above PF contribution is correct as per PF act.
Best Regards,
Ramprasad Raju

From India, Chennai

Dear Mr. Raju,

The monthly contribution submitted to EPFO can be distributed in three parts. EE Share, ER PF Share & ER PN Share (which you have mentioned 780, 239 & 541).

When an employee leaves the employment of the organization, (s)he have to fill the EPF Forms as per his / her eligibility. In this, Form- 19 is filled to withdraw the EE Share and ER PF Share (which you have mentioned based on 780+239). Which I think, generally your subordinates fills after leaving the job.

Whereas for ER PN Share, Form 10C / 10D is submitted, as per the applicability.

If there is an employee, who is the EPF Member for less than 6 months, don't eligible for withdrawing this Share. But his / her membership tenure is more than 6 months but less that 9 years & 6 months, then (s)he can fill Form- 10C and withdraw this share. In the same way, if the service tenure is more than 9 years and 6 months, then Form-10D is filled and this share becomes monthly pension which is credited to the members pension a/c, as per act, on monthly basis after attending the age of 50 / 58 years.

Hope this will clear your doubt. Cheers.

From India, Delhi
Dear Mr. Bhuwan,
I understood the process to get the ER PN contribution now. Thank you very much for the immediate response with clarification.
Further I would like to know, whether the fixed Rs.780 PM contribution is correct as per the act. Because everyone are speaking of 12% of basic contribution towards PF. But our company is contributing a fixed Rs.780 for each and every employee irrespective of their basic pay. Is there any exceptional law?
I too understood from other sources that ER PN is 8.33% of Employer contribution. Why our company is deducting Rs.541 towards the same, even though the ER contribution is Rs.780 only?
Please clarify my concerns to help some of worried colleagues. Thanks.
Best Regards,
Ramprasad Raju

From India, Chennai
Dear all Respected Seniors,
I have one doubt in PF issue ie.. i want to know that whether PF should be calculated on Gross or Basic plus DA.
if also possible can any body able to provide any latest proof stating the amendment stating that government has
changed the rule that PF has to be calculated on gross and not from Basic + DA.
I beg to clarify and guide me at the earliest possible.

From India, Madras

Dear Mr. Raju & Mr. Raj,
The EPF & EPS Contribution is always calculated on Basic + DA. The EPF Act itself says regarding it. You can go through the EPF Act and Amendments.
So, the contribution is calculated @ 12% on Basic + DA or Rs. 6,500/- (as lastly notified), whichever is less.
It is also called wages ceiling for EPF, and now it is under-process for revising to Rs. 15,000/-.
Hope the doubt of both of you is clear.

From India, Delhi
Dear Mr. Bhuwan,
Thank you for the clarifications.
So, now it is clear for me that the way my organization is contributing with fixed amount Rs.780 for all employees irrespective of their Basic+DA, may not be the right approach for ePF contribution.
Best Regards,
Ramprasad Raju

From India, Chennai

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