How Do You Calculate the Employer's PF Share on a 40,000 Salary?

Please tell me if anybody has a basic salary of 40,000/-. The person wants to deduct 12% of his basic salary as PF.

Employer's Share Calculation

Then, my question is, what should be the Employer's Share:
A) 13.61% of 6,500/-
B) 13.61% of 40,000/-

Thanks,
Pooja

Miss Pooja,

12% is the standard deduction from both the employee's and employer's sides, which should be calculated based on the earned basic of that particular month.

Now, the question remains about the additional 1.61% that the employer has to pay, which consists of:
- Admin Charges 1.10%
- EDLI Admin Charges 0.50%
- Inspection Charges 0.01%

Admin charges should be calculated on the total PF earnings (Wages), while EDLI and Inspection charges should be calculated on EDLI wages (Pensionable wages).

The next question is whether the employer wants to pay based on $6500 or $40000.

Regards,
Arun J.