(2) Example: Method of calculating Provident Fund Contribution from the Monthly salary.
Employees’ Salary =
Basic DA HRA City Conveyance Total
wages allowance etc.
4000 2000 500 100 200 6900
Attracts PF Deduction PF not to be deducted.
i.e.: Rs.6000/- @ 12% = Rs.720/-
Matching share payable by Rs.720/- Out of this, 8.33% Employer. of ‘wages’ is diverted to Pension Fund (i.e.)
Rs.500/- Balance
Rs.220/- will go to
Employer’s share of
Provident Fund.
The employer is also required to pay “Administrative Charges’ to the Employees’ Provident Fund Organisation for maintenance of Provident Fund account etc. i.e. @1.10% of wages of each employee under EPF and @ 0.01% under EDLI scheme. Thus, in this case, the EPF dues payable by member and employer are as under:-
Share
Wages
(Basic+DA)
Rs. Contribution Admn. Charges
Provident
Fund Rs. Pension
Fund Rs. Insurance
Fund Rs. PF
Rs. EDLI
Rs.
Employee’s 6000 720 --- --- --- ---
Employer’s --- 220
(720-500) 500 30 66 2
(Minimum)
Total 940
(EPF Scheme, 1952) 500
(Pension Scheme,1995) 30
(EDLI Scheme, 76) 66 2
In the Annual Provident Fund Statement, the EPF Contribution alone is shown i.e. @ Rs.720/- p.m. as Employee’s share and Rs.220/- as Employer’s share, calculated for 12 months (subject to wages remaining same for the whole year), as current year contribution. ‘Year’ means, commencing from the wage month March to February of the following year. No Provident Fund contribution will be deducted on the following:-
Over Time Allowance/Bonus/Commission/Lay Off Compensation/
Medical Allowance/Conveyance Allowance/House Rent Allowance/
City Compensatory Allowance/Cash Allowance/Honorarium/ Washing /Shoe Allowance