Firm Newly Registered Under EPF - Doubts Regarding PF Implementation - CiteHR
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Dear Sir / Madam

My firm has recently crossed 20 employees strength and has taken registration under EPF

I am working in the accounts section and I am responsible for preparing salary statement and deducting ESIC. Since we have registered for EPF my responsibility will also include deduction of PF from employees salary.

Before under taking the same I want to be clear about the concepts of PF. My Main doubts are as follows

1. What shall constitute salary as per EPF? The salary structure of my firm is comprised of basic salary plus commission on sales (this is paid to sales staff and it is contingent on monthly sales volume.

Should PF be deducted only on basic or should it be deducted on the basic salry plus commission amount? Presently for deducting Staff ESIC Contribution, we are considering the salary as Basic salary plus commission amount. Please advise as to which method is correct for arriving at salary for the purpose of ESIC and PF

2. Since My employer is now registered under EPF, when a new employee joins (who is already a member of EPF), should my employer compulsorily deduct Pf even if the new joinees salary is above Rs.15,000? Also, if a new employee (who is not a member of EPF previously) joins with a salary above 15,000, is it up to the employer to decide whether or not to grant PF to the new joinee (if the new joinee decides he/she wants to join PF).

3. Presently, my employer allows 2 earned leave per month. Any un-availed earned leave at the end of the month is added to the salary and paid to the employee. Should the earned leave encashment amount be added to the PF salary?

4. Some staff in my firm get conveyance allowance and sales persons are given cash reimbursements of the actual travelling expenses incurred. Should either of these be included for PF salary calculation?

Best Regards

John
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1) Basic + DA is salary for EPF purpose ( celiing of 15000 is mainained under EPF, and over it . VPF can be applied , if employoer and employee both are argreed to contribute)
2) employer has to offer the EPF option to every employee,
3) paid earned leaves are counted in earned salary
4) TA reimbursement is not a part of salary
Sir, thank you for the reply.
Regarding point no.1, for ESI purpose, should we take he salary as Basic + DA only?
Regarding point no.2, if the new employee is having a salary greater than 15,000 and he/she was previous member of PF, is it compulsory to include him/her for PF?
Best Regards
John
Regarding point no.1, for ESI purpose, should we take he salary as Basic + DA only?
Answer :- ESIC always calculated on gross salary which is fixed per month.
Point no.2, if the new employee is having a salary greater than 15,000 and he/she was previous member of PF, is it compulsory to include him/her for PF?
Answer:- Yes
Dear Mahesh Sir, by gross salary, do you mean basic salary only in my case, as we do not have DA?
for ESI we calculate on Basic+ including all fixed allowance per month. For calculation of EPF amount that time we only consider Basic or Basic + DA.
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