Is It Legal to Show PS Contributions Separately on Payslips? Seeking Your Advice

Dear All,

Please note, I have joined a mid-sized company, though it is a 50-year-old company. Before this date, there were no professionals hired. The management is now hiring professionals and in an expansion mode, which is why I joined the board.

To my surprise, I found that in the Payslip, we are showing PF deduction of the Employee, and under Employee, we are also showing the bifurcation of 8.33 under PS and the balance under PF. To the best of my knowledge, it is legally incorrect, and as per the Act, it is not right. However, before going to the Management and pointing out the same, I need your feedback on the issue. Also, please let me know if I am correct, and what could be the implications.

Regards,
Shakila

Hi,

Generally, companies show only the total amount deducted under PF, which is 12% of Basic and D.A. However, what your company is doing is giving additional information to the employees by showing the bifurcation of the PF amount. As per PF rules, 8.33% of the PF amount deducted goes towards the pension scheme for the employees, and the balance is transferred to the Provident Fund.

Regards,
Naresh Taneja

Dear,

What I mean is we are showing only the employees' contribution in the payslip, and from that contribution, we are showing the bifurcation. I think to show the bifurcation, you need to display the employers' contribution as well. As far as my knowledge goes, the employers' contribution goes to PS & PF @ 8033 and 3.67.

Hope it is clear.

Regards,
Shakila

Dear all,

I mean we are only showing the PF Employee's contribution in the payslip. I think we should also display the bifurcation of the PF statement and PF Summary, including the employer's contribution at 8.33% and 3.67%.

Regards,
Jitendra Raghav

Hi,

There is absolutely nothing wrong in what your company is doing. The law does not stipulate anything on this. If you are giving additional information to employees, there is no harm.

With regards,
Daleep

Hi,

It is understood that your company is showing 8.33% of P.F. contribution on the earnings of the employees in the payslip, right? To my knowledge, the employer has to deduct 12% of Basic + DA of the employee's earnings in the particular month. The question of bifurcations of 12% into 8.33% + 3.67% of employee contribution does not arise. The bifurcation of 12% into 8.33% + 3.67% will arise when the employer matches contributions towards P.F. for an employee. So it is clear from whose contribution your company is showing the bifurcation on the employee payslip.

Regards, Maheswara Rao.CH

Dear Mr. Rao,

Exactly, that's what I am meaning, but we are doing the same. Because in the Payslip, we are not showing Employer's contribution and still showing employees' contribution under PF and PS heads.

Are we doing wrong? If yes, what corrective measures can we take now?

Regards,
Shakila

In the payroll, there must be a deduction of employees' contributions only. The employer's contribution is bifurcated, as you said 8.33%, and the rest will be diverted to account no. 1. Such calculations are done in our worksheet of abstract for remittance, and the same must be done in every establishment. The calculation must be consistent nationwide. Am I correct?