Calculation Of EDLI

Dear Sir/Madam,
Please guide us for considering the EDLI basis amount for an employee whose Basic salary is more t han 6500.00 PM and has newly joined in our company during the month. His paid days for the first month is less than the actual monthly days. His PF basis amount is coming more than Rs. 6500.00.
Eg. Basic Amount = Rs. 10,000.00
DOJ – 10.07.2009
Paid days – 22.
PF basis amount = 10000 * 22/31 = 7097.00.
EDLI Basis Amount = 6500 *22/31 = 4613.00.
Is it correct

Dear Yogesh,
EDLI(0.50% of basic) will be caliculated on drawan basic salary maximum to Rs.6500.So in your case employee has earned morethan 6500 and you have to pay EDLI on Rs.6500 not prorata basis.
For example for above mentioned employee you will pay the EPS amount as Rs.541 not on prorata basis.In the same way you have to calculate on the earned basic.
Apart from that you need to pay EDLI admin of 0.01% of basic also.
I hope i have cleared your doubt.
Regards,
Keshav Reddy.

Hi.

Let me make it clear. Always have in mind while running the payroll.

For PF admin chargs, calculate 1.1% on total (Bas+DA)

For EDLI , calculate 0.5% on basic or 6500 whichever is less.

Eor EDLI Inspection/Admn charges, calculate 0.01% on basic or 6500 whichever is less.

Round off all the values to nearest rupee. To be frank, calculate these account heads for every employee, finally sum up the column and round off the figure for each column. Now your EPF challan remittance A/c.1,10,2,21,22 are finsihed at one go for that month's payroll. This would avoid the calculation errors in finance department.

Often, confusion is arising in this forum because I have seen that many members just refer to 'basic wages' blindly and not specific with actual basic or ceiling limit for EDLI.

Now the trend in Employer contribution is followed as 780/- maximum, here EPS is calucated as 8.33% on 6500 or basic whichever is less and EPF is (Employee PF contribution - EPS contribution) share. There are good companies that contribute 12% without ceiling but always see to that employee and employer contribute 12%. Hmmm... what to do.!!!!

If employer restricts his EPS to 6500 then,

(say) for Basic = 10000, then Ee PF= 1200, Er PF= (1200-541), Eps=541

But RPF has accepted this version also, ie., EePF=1200, ErPF=239, EPS=541.[/B] So you have altogether 4 models to follow as you wish.

Hope the doubt is clear now.

Regards,

Chandru

Consultant

Hi All
greetings for the day
I have rececently join this forum and need guidance on that can we deduct P.F. on prorata basis in case employee's actual basis for the month is more than 6500/= after deducting leave without pay.
If any body have any case law on this subject please provide
thanks & regards
Raj