Confused About Provident Fund Calculation? Let's Clear Up the ₹780 Mystery Together

Hi folks, I am new to Cite HR. Can anyone help me out with PF calculation? I have referred to many of your comments, and I understand that PF is calculated as 12% of the basic salary. However, in some posts, I found a random amount of ₹780/-. Can anyone please clear my doubt?

The ceiling for PF deduction is ₹6,500, i.e., up to a basic salary of ₹6,500, it is mandatory to deduct PF on amounts less than or equal to ₹6,500.

12% of ₹6,500 is ₹780. Therefore, at times, the deduction is 12%, and at other times (when the basic salary is ₹6,500 or higher, but based on mutual consent between the employer and employee), the PF amount deducted is ₹780.

I hope I have clarified your doubts.

Regards,
Baisakhi

Statutory Obligation for EPF Contribution

The statutory obligation for EPF contribution is up to Rs. 780 only. However, if the employee and employer wish, this can be enhanced in compliance with the consent of the Regional PF Commissioner.

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Here is the breakup for PF Calculation. PF is calculated on basic & DA as follows:

Employer Contribution

- 13.61% (Break Up: EPF - 3.67%, FPS - 8.33%, admin charges - 1.1%, EDLI - 0.5%, Admin Charges on EDLI - 0.01%).

Employee Contribution

- 12% (Breakup: EPF - 12%).

The higher limit for PF deductions is ₹6500/-, and therefore above this limit, the deduction of PF is optional for the employee but with the consent of the employer & PF Authorities.

Thanks and warm regards,
BIJAY

PF Calculation Sheet Attached

Please find attached the PF calculation sheet file herewith.

Thanks

Regards

I am new to Cite HR. Can anyone help me out with PF calculation? I have referred to many of your comments, and I understand that PF is calculated as 12% of the basic salary. However, in some posts, I found a random amount of ₹780. Can anyone please clear my doubt?

Statutory Obligation on PF Contribution

The statutory obligation on PF contribution is up to a salary of ₹6,500. This means if the salary is ₹6,500 and above, the contribution will be uniform at ₹6,500 x 12% = ₹780. Note: If the employer and employee wish, the contribution can be based on a higher salary as well as higher rates.

Regards,
Abbas P.S

PF calculation is only based on basic pay or Basic pay + D.A.? Please answer my question.

PF ceiling has now been extended to INR 15,000. Hence, 12% of this amount would be INR 1,800. If you have staff whose basic salary + dearness allowance exceeds INR 15,000, you can limit the contribution to 12% of INR 15,000, i.e., INR 1,800.

The notification from EPFO regarding the extension of the wage limit to INR 15,000 is enclosed here for your information.

Regards,
S.N. Raju U.