Monthly Interest Calculation On Provident Fund

kanwaljit singh
My Institution has around 90 branches in the State. The Provident Fund system is centralized at Head Office - meaning thereby, Provident Fund Deducted on Salaries of employees working in Branches is remitted through Debit Notes at Head Office, where the same is accummulated in their accounts. Along-with the above PF accounting for Head Office employees is also done. Monthly Salary of employees working in Head Office is paid by 25th of the month (5-6 days in advance) whereas for Branches it is variable i.e. by 7th of next month. The Provident Fund amount of all the employees (Head Office & Branches) is transferred in their respective accounts by 15th of next month by posting of voucher. Now, my question is - Under Employees Provident Fund Act, 1952 - How is PF Interest to be calculated on the monthly running balance - whether interest for the current month (voucher posting month) is to considered or preceeding month ( salary month) ? Kindly explain with some example.
jrhrmba
The Rules for PF is as Follows
1. Companies can give PF based on the Gross Salary Drawn
2. Limited PF: Which is restricted to Basic and DA
The interest for PF is computed on a Reducing Balance method
12% from the Employee
12% from the Employer
From the Employer's Contribution, a part of the fund is contributed to Employee Pension Scheme (EPS)
Calculation for EPS
1. Rs.6500 * 8.33% (6500 is the maximum ceiling for PF) , this is equal to Rs.541
2. If the Basic+DA is lesser than 6500 then the sum of the two * 8.33%
Whichever is lesser, that amount is contributed to EPS and the Rest id taken to the EPF Account
Interest is Calculated on a monthly basis using the Reducing Balance Method
BrIjLAl Arora
PF is deducted on Basic + DA it's 12% From Employee Side and 13.61 from Employeer side.
Bonus is 8.33% to 20% of Basic Paid on Fastival.
ESI is 1.75 from Employee Side
4.75 from Employeer Side.
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