Basic salary+DA = 50000 then how calculate contribution according employer
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it is above ceiling limit no need calculate contribution of PF
but he/she recently joined with you and previous employment of he/she member of PF so, we have to deduct and contribute PF.
There are two ways, one to give PF on Rs 50000, ie, on the basic and DA without restricting the PF qualifying salary to Rs 15000. another way is to pay it only on Rs 15000. For that you have to provide one more column in the payroll sheet for "PF Qualifying salary" in which you can put 15000 which will ultimately be taken to find out the PF contribution.
Nowhere in the PF Act it is stated that you should not pay contribution on salary above Rs 15000 and most of the good companies follow the practice of paying it on higher salary. Only thing is that pension fund contribution of 8.33% by the employer is restricted to 8.33% of 15000.
Dear Mr. Madhu,
Further to the above discussion, request your advise on the case below :
Employees's Gross wages : Rs.42000 /- (Basic + Special Allowance +Mobile allowance)
EPF Wages : Rs.15000/- ( as per ceiling limit)
What should be filled in Column C - Gross Wages in ECR XL? a)Rs. 42000/- i.e. actual GROSS WAGES?
b)Rs. 15000/- as per ceiling limit.
Also, on what is the PF Admin Charges calculated ?
Please refer this example below :
Mr. A 42000 15000 15000 15000 1800
Mr. B 30000 15000 15000 15000 1800
Mr. C 24000 15000 15000 15000 1800
Mr. D 18000 15000 15000 15000 1800
Kindly help and advise.
If you contribute on actual salary without restricting to Rs 15000, you can fill Rs 42000 in PF Salary I don't know what do you mean by Col C) and in such cases the PF contribution would be 12% of 42000, Rs 5040, Employer contribution to Pension Fund will be 8.33% PF Rs 15000 (till a final decision is made and system is adjusted accordingly by EPFO) Rs 1250, employer contribution to PF will be Rs 3790 (5040- 1250) and EDLI will be 0.5% of Rs 15000 or Rs 75.
On the otherhand, if your policy is to restrict the contribution to 12% of Rs 15000,make it as 1800 employees share to PF, 1250 (pension fund), Rs 550 employer's share to PF and EDLI Rs 75
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