KK!HR
Management Consultancy
Glidor
Hr Consultant
Geetashaileshpandey
Human Resourse
+1 Other

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Suppose one employee's Gross salary is Rs. 30,000/- out of which Basic salary is Rs. 20,000/-. His EPF wages is Rs. 20,000/-. Now is this employee is eligible for EPS.
1) If yes, then on how much salary EPS will be calculated?
2) If no, then will the entire contribution of 24% (from the employee and employer) will go to the provident fund account of the employee.?
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EPF is a labour welfare scheme, and if the establishment is covered under EPFO, then they have to offer the EPF membership,
the employer has to handover the form 11( revised) to employee, and ask him to fill the same, and annex the KYC documents,
if the employee has an active epf account or uan from past employment anytime, then he has no option to decline membership, but to join the EPFO.
now regarding EPS, if the member has contributed anytime in his past service to EPS, then his EPS should be deducted on 15000/- @8.33 % i.e 1250/- and balance of 2400 ( 12% of 20000) i.e 1150 should go to a/c 1 i.e EPF
there is no bar to deposit the EPS for new employee above 15000/- even, however he has to meet the requirement of 9+ years for pension eligibility, and not to withdraw the EPS account within the 10 years.
but if the employee has a vision to withdraw the EPS below 10 years then, (for new employee only, who don't have any UAN or EPF membership in past) the employer has to make ECR as EPS salary "0" and whole of 2400+2400 = 4800 would go to a/c 1 of the fund
employees who have EPS account anytime in their past employment, have to continue the EPS contribution. irrespective of present salary structure exceeding the limit.
thank you sir for your reply & clearing my doubt. If a fresh employee (was not EPF member earlier) wants to withdraw his pension after 10 years, in that case How much amount should we take into consideration for EPS calculation - Basic salary Rs. 20,000/- or statutory wage ceiling Rs. 15,000/- or any one can be taken into consideration ?
Dear Abhishek= Pension is calculated using the formula
= pensionable salary X pensionable service
--------------------------------------------------
70
where pensionable salary is the average salary of 60 months from 30.08. 2014 and earlier it was average of 12 months. The contribution to EPS is based on maximum of the wage ceiling fixed under the EPF Act 1952, It is seen that the RPFO authorities have been adjusting the EPS contribution based on 8.33 % of the salary reckoned on the basis of the prescribed salary ceiling under the Act (Rs 6,500 upto 30.08.14 and Rs. 15,000/- thereafter) though the EPS'95 has a proviso for reckoning on actual salary basis but has not been implemented. So even where the PF contribution was made at the actual salary basis, the RPFOs have been adjusting EPS contribution only on the salary ceiling basis. You may verify the position in your case.
Why you want to know, the website will do all the calculations.
pensionable salary ceiling is 15000/- at present, and after 10 yrs of service, it would get payable only after 58 yrs of age , hope the employee would get more years of pension able service added to his / her EPS account
for full service 33 yrs (+2 yrs bonus yrs added by EPF) and pension is 50% of present salary ( 60 months average) i.e 7500 , (50% of 15000) and it get modified time to time, at regular intervals.
Dear all
I want To Ask a question That My company is deducting ESIC & Pf Of Employees for SIX Month's But No UAN No will be Generated or Distributed , As Hr employees Asking for His pf No & All But The Management Not deposite Pf Amt to Pf Office , I Should Not Say Against Managent , How Can I Handle The Situation , In company there is 50 Employees Including Women & the Risk factor During Working Hour;s is 50% .
Dear Geetashaileshpandey,
Please note that as a HR you are at liberty to inform your Management to pay the statutory dues on time and be compliant always.
May be you need to fight for this in a smart way with your Management for this.
And I did not understand the risk factor you are mentioning, is it about hazardous operation or risk factor of asking you the question on PF ESIC.
Respected U S Sharma Sir,
Can we take Rs 15,000/- into consideration for calculation of EPF contribution instead of basic wage Rs. 20,000/-? As statutory wage ceiling for EPF is 15,000/-. please guide me.
Dear Abishek: Yes, it is permissible to limit PF contribution to the wage ceiling limit set in the PF &MP Act, 1952, presently it being Rs. 15,000/-
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