Confused About PF Ceiling for New Joiners with High Basic Salary? Let's Discuss!

Dear seniors,

Please clarify the PF ceiling amount for an employee who joined the organization on the 4th and whose basic salary is more than Rs 6500 for that given month.

My payroll software is dividing this Rs 6500 by the number of days in the month, and the "PF employee contribution" is being calculated only for the days the employee was present.

Regards,
Sam

If you do not contribute or provide coverage to an employee whose salary at the time of joining is more than Rs 6500, and the date of joining falls somewhere in between the month so that the salary for the first month will be less than Rs 6500, resulting in the automatic deduction of EPF, you will need to either manually calculate their salary for the first month or make adjustments in the system to avoid any PF deductions from the employee.

Regards, Madhu.T.K

Thank you very much, Madhu Sir. I am sorry for the mistake in my question; it should be employers' contribution instead of employee contribution.

I just wanted to know whether the ceiling amount of $6,500 to calculate the employers' PF contribution remains constant or will it vary proportionately depending on the employees' DA + BASIC for the given month.

Regards,
Sam

Rs. 6500 is the ceiling amount which can't vary, but the employer's contribution may vary according to the basic+DA of the employee whereas its percentage contribution always remains the same, i.e., 12%.

It is not mandatory that employers' contribution should be restricted to a salary of Rs. 6500. If the employer is willing to contribute based on a higher salary, the ceiling of Rs. 6500 will not apply.

Regards,
Madhu.T.K

Dear Sam,

I understand the tool is calculating the breakup. Please check if the leave balance is updated appropriately, the weekly offs and holidays are set up correctly. Maybe the tool, by default, is considering non-working days as LOP - just a thought.

Regards,
Nithy

Hi Sam,

What I understand from your query is that you joined the organization on the 4th of the month. Correct. If it is accurate, you will be eligible for pay and allowances from the 4th of the month for that specific month in which you joined the organization.

As for contributions towards PF, you can make your contributions to the extent of 100% towards PF.

Regards.

Dear PF Calc,

I tried to attach an Excel file but encountered an error while uploading the file.

Deduction Contribution Names Basic HRA Cony others Gross No. of Days Gross salary Emply Basic EPS Wages/Basic > 6500 PF ESI PT Adv. Mob. Total deductions Net pay PF 12% PF 8.33% PF 3.67%

Mr. A 14000 7000 1540 6113 28653 31 28653 14000 6500 1680 0 200 - 1880 26773 1680 1139 541

Mr. B 11440 5720 1258 4995 23413 31 23413 11440 6500 1373 0 200 - 1573 21840 1373 832 541

Mr. C 14000 7000 1540 6113 28653 31 28653 14000 6500 1680 0 200 - 1880 26773 1680 1139 541

Mr. D 7600 3800 836 3319 15555 28 14050 6865 6500 824 0 150 - 974 13076 824 283 541

Mr. E 5500 2750 605 2300 11155 31 11155 5500 5500 660 0 100 - 760 10395 660 202 458

Mr. F 6400 3200 704 2795 13099 29 12254 5987 5987 718 0 100 - 818 11436 718 219 499

This is for your information.

Regards, Chandra Sekhar.

Hi,

Please find the PF calculation attached.

Regards,
Chandra Sekhar.