Information Regarding Provident Fund - CiteHR
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Hello All,
I have one query regarding provident fund deduction, As per rule of Provident fund contribution is from both side 12% from Employee & Employer that will on basic salary ri8.
Is there any rule that Employeer can deducted both amount from employee salary.
As I m Working in one of IT software pvt ltd company as HR, We has to start to deduct provident fund but boss it telling that employee & employer contribution both will be deduct from employees Please any one help me to know the rules of Provident funds.
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Himani, The answer to your query is a big NO. It is startling to know that many Co is having HR without any basic knowledge of labor laws. Varghese Mathew
Hello Varghese,
Your are right actually I m having that basic knowledge which we have learn in our education on basic that I have said to my boss that can't be possible but than also boss is telling it is possible it is working so just to know that.
Dear Himani,
Warm greetings !!!
You have issued Appointment letter to the Employee. On this salary part has been mentioned.In CTC you have mentioned the PF component . 12% of Basic Pay for EPF. 12 % of Basic Pay out which 8.33% or Rs,. 541 whichever is less. Remain of will also to be deposited along with 12%. Hence it has to be deducted from Employee Salary only.
CTC means Gross salary+ Expenses incurred by Employer on behalf of Employee.
Please let me know if you need any further information in this regard.
Warm regards,
Pranab Chakraborty
Mr Himani, It is good to know that you have basic knowledge.Then show para 31 & 76 of the Employees Provident Fund Scheme to your boss . Varghese Mathew
If your company is following CTC concept, then it is correct. else it is absolutely wrong.
CTC = Gross Salary (Basic Salary + DA + Allowances) + Employer Contribution of PF + Employer Contribution to ESI + Annual Benefits (LTA, Medical Reimbursement, Bonus, Fixed Incentive) etc.
PF should be calculated on Basic Salary + DA, subject to the max of Rs. 6500/- or basic salary which ever is less. (This limit can be extended upon the discretion of the Company / Management)
Hence the PF contribution from Employee is = 6500 x 12% = 780
Employer Contribution is : 6500 x 8.33% = 541 + 6500 x 3.67% = 237 (Total of 780)
Praban ji & Beem ji,
CTC means Cost To the Company i.e exps that are incurred by the Co. for the… isn’t it ? When contbn is shown in the CTC why shud the pay it ??? or if the employee is paying it how can it appear under CTC…? isn't that cheating ?
If employer and employee contributions are to be borne by employees alone, then it is totally against the statutory provisions under EPF & MP Act,1952.
I suggest, you better conduct a study class about this Act, to your boss and also the impact of the current practice followed by your establishment
regarding this.
R K Nair
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