Understanding Pension Calculation and Pro-rata Basis for PF Deduction

Dear All,

The wage of an employee is 10,000/- per month. He joined on 20th May. While calculating PF, I calculate PF for 12 days and remit the amount. Please note that we deduct PF in all cases irrespective of the salary limit of Rs.6,500/- per month and remit it to RPFC.

While doing so, when we calculate the Pension amount, while restricting the calculation to Rs.6,500/-,
a) do we calculate the proportional Pension amount and remit it
b) or do we need to remit a Pension amount of Rs.541/- even though we get Rs.216.58 as a pension for 12 days.

Could you please clarify?

Regards,
Prakash K

Dear Prakash K,

The pension fund contribution will be calculated as per the following formula:

(Basic Salary (Max. Rs. 6500/-) x Number of days worked / Maximum working days) x 8.33%

Dear Prakash,

The ceiling of the pensionable salary is Rs. 6,500. Please calculate on a pro-rata basis for 12 days only and remit Rs. 216 to the pension fund.

Abbas. P. S.