Partner - Risk Management
Hr Consultant
Labour Consultant
Pf & Esic
+4 Others

Thread Started by #asb1811

Dear All,

As I am aware that PF Ceiling limit for deduction is 15,000. I have recently received my first Salary Slip from the employer, in which following bifurcation of the salary is mentioned;


Basic = 9357

Connveyance = 1600

Bonus = 584

Special Allowance = 5391

Total Gross = 16,950


PF = 1800

ESIC = 297

PT (Madhya Pradesh) = 208

My argument with the HR is that my PF should be deducted on Basic i.e. 9357 * 12% = 1125, whereas our HR Manager is arguing that as the ceiling of PF is Rs. 15000 so it will be deducted on 15000 as my total earnings is more than 15000.

In case my Basic Salary would be 15000 or more...then only PF deduction would have been Rs. 1800, but my basic is only 9375, then it should only be Rs. 1125.

Kindly help me in this...Am i correct or my HR Manager is correct?

Thanks in advance.
1st June 2017 From India, Bikaner
Please ask your HR to consult with a PF Consultant or read the bare act
1st June 2017 From India, Ahmadabad
HR is considering all amounts except conv for pf deductions, and by this way the employee is getting extra benefit from employer’s contribution side
1st June 2017
@GLIDOR Employers Contribution is also deducted from Employee’s salary..Even though in that case total amount deducted should be 1125+1125...and not 1800
1st June 2017 From India, Bikaner
PF Contrubution should be on Basic+DA, in your case Basic is 9357 and deduction should be made in this, so please ask HR to review and study the Defination of "Wages" in Bare Act EPF & Misc. Prov. Act 1952.
1st June 2017 From India, Delhi
Hi, I agree with Mr Rajesh. Your HR has considered incorrect amount for calculating PF.
1st June 2017 From India, Mumbai
Dear experts,
I (hr executive) join new company some time before. I am facing problem to understand salary breakup here, as i know as per rule
basic is 50% of gross and HRA is 40-50%of basic and other allowances like conveyance, LTA, and others should be in salary breakup.
But in my company salary breakup is different. Also pf deduct on minimum wage or 15000.
please help me to understand this breakup of salary is wrong or right.
Please have a look on attachment.
2nd June 2017 From India

Attached Files
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File Type: docx sal breakup.docx (153.9 KB, 209 views)

This site shall answer most of your concerns in payroll.
It would be a good idea to understand salary components along with labour law workings the way they are done in a company.
Am not endorsing any brand.
My colleague worked up his way with payroll nuances from an
experienced person.
Should you want i can connect you.
2nd June 2017 From India, Mumbai
If an employee’s basic salary is 18000 Rs, then we have to calculate pension and EDLI on only 15000 Rs.
Employee PF Contribution 12 % On 18000 = 2160
Employer Pension Contribution 8.33% On 18000 = 1250
Employer PF contribution = 2160-1250 = 910 ( Here we don’t take 3.67% )
Note : When you use ECR excel it will be calculate automatically. We just need to enter basic salary of employee.
Read more details @ How To Calculate PF Of Basic Salary More Than 15000
2nd June 2017 From India, Hyderabad
As per the attachment the employer has taken Rs. 15,000/- as upper limit of Basic for all the employees for PF Contritbution calculation, whose Basic is over & above Rs. 15,000/- thats why the PF Contribution is Rs. 1800/- i.e. 12% of Rs. 15,000/-
2nd June 2017 From India, Ahmadabad
Salary breakup should be in a structural way.
in your attachment the breakup like conv & hra is variable but not in a fixed %.
Basic + DA = should never be lesser than 50% of gross.
HRA cannot be greater than 50% of basic and 30% of gross.
Rest all allowace can be defined as per need but in a proper grade wise structural way.
In case of any query, feel free to call me on 9810654048.
2nd June 2017 From India, Delhi

You have not correctly posted your salary details. Your Basic salary may be Rs.9,375/- and not 9357 as mentioned by you. So be very careful while furnishing the details. Besides, we do not know the Terms & Conditions of your appointment. However, looking at your post, followings are my views.

If your employer or the "Heman" Resource Manager is deducting both the PF contributions (Employee's & Employer's) from your salary tell them not to do any charity for you. Deduct only 12% contribution on your earned Basic salary, which is prescribed in the EPF&MP Act, 1952. If he is not listening, write mail to his superior or the Management.

Also inform your HRM that PF Contribution is not payable on Bonus amount. First of all Bonus is not payable on a monthly basis. Its totally depend upon Profit & Loss account of the Company as per the provisions of Bonus Act. Company cannot just pay you only 8.33% Bonus. He has calculated minimum Bonus amount of Rs.7,000/- per annum, which is also not correct. You are eligible minimum amount of Bonus of Rs.782 per month @8.33% (as per Minimum Wages).

Whatever you stated in your post is correct, than you are right and your HR Manager is not suitable for HR dept. who doesn't know basic things of HR.

3rd June 2017 From India, Thane
PF will be deducted on basic and DA
In most cases special allowances are same as DA
so PF will be deducted on the total of both.
The PF department is already fighting the matter in Supreme Court where it is saying that the act says it is to be given on entire fixed component and there is a good chance of the SC giving the judgement in favour of the PF department. So they are being careful and the final difference in any case is small
3rd June 2017 From India, Mumbai
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