[email protected]
Finance Manager
Statutory Complaince/labour & Employment
Premkumar Nair
Manager (hr)-retired
+1 Other

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Dear All,
In case an employee has worked for 17 days in a month and taken leave for the rest period, than on what amount of (Basic+DA+RA), Provident fund liability be calculated ? On actual salary of 17 days or of total 30 Days. Also, is there any provision than in such cases where an employee didn't work for the whole month, the limit of 6500 be reduced on pro rata basis for comparison?

From India, Delhi
Dear Jain,
First of all, the contribution under various welfare legislations is to be remitted on the actual earned wages and not on assumed monthly wages. For EPF, it is subject to employer's obligation on the ceiling of wages of Rs.6500. In case of leave without pay during the month, no deduction or remittance shall be effected.

From India, Mumbai
Meaning to say that if employee has worked for 17 days and has earned wages for EPF=Rs 6000, than in such case, limit of Rs 6500 be reduced on pro rata basis to 3564 (6500/31*17) for comparison and max. Rs 3564 be considered for calculation?
Or the limit should remain same, and PF to be calculated on 6000 Rs. (being less than max. limit of Rs 6500)

From India, Delhi
Dear Harshit, Pf deduct on earn basic earning.
for ex- if mr x work for 17 days and rest days is unpaid leave than it should be deduct on 17 days earn basic and if it is paid leave than it should be on 31 days earn basic like on full salary.

From India, Mumbai
Sir, thanx for sharing your valuable knowledge
My question is, if an employee has worked for 17 days and rest are unpaid leaves than in such case, whether the ceiling limit of Rs 6500 would also be reduced on pro rata basis for 17 days i.e.3564 (6500/31*17) for comparison basis assuming the establishment contributes PF on ceiling limit basis.

From India, Delhi
in my little knowledge on the subject, yes if unpaid leave allowed and the person is entitled for Rs 6000/- after deduction of leaves, and company is contributing on basic ceiling than the contribution shall also be reduced according to the actual amount in comperision of Rs 6500/-. 6500/- is for complete month, so is an employee work and have earning less than that, than in same way contribution will also be decreased.
this ceiling of Rs 6500 per is for month. the basic or DA shall so comes down if any employee worked for 17/18 days, and contribution has to be filed accordingly.

Dear Jain,
I feel that the contribution cannot be on prorata basis for the days of work, but for the total earned wages for the month. For the give example of 17 days work, the calculation may be as under:-
A) If the salary for the period of 17 days is less than or equal to Rs.6,500, the contribution is to be paid on the total amount of salary;
B) If the salary exceeds Rs.6,500, the contribution be restricted on the wage ceiling of Rs.6,500.
However, learned seniors may please comment.

From India, Mumbai
If any employee's pf not once, u cannot deduct pf if his earning goes down due to leave. If any employee work for 17 days so naturally his earn basic goes down, it not means u can start deducting pf.
From India, Mumbai
As rightly said by Mr. Premkumar, if the basic salary of the employee for 17 days earning is less than or equal to Rs. 6500/- then employers PF contribution will be on actual. But if the basic salary of the employee for 17 days earning is more than Rs. 6500/- then the employers PF contribution will be restricted upto Rs. 6500/- basic pay because of the cap.
From India, Ahmadabad
Dear Mr. Harshit
It seems that you are not reading the post carefully or you are not understanding it clearly. With regards to your query, if the employee has not worked for the full month and if it is on LOP then the Basic will be NIL so how can you contribute towards PF, please explain

From India, Ahmadabad

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