Is PF Deduction on Earned Leave Necessary During Final Settlement? How Do You Handle It?

phanikumarsista

Deduction of PF on Earned Leave During F&F

Is it necessary to deduct PF on earned leave at the time of F&F as per the PF Act? If 'Yes', how can we remit the same? Currently, we are entering the date of relieving for the past month through ECR. We might conduct F&F at a later stage for a particular employee.

pon1965

Yes, EL encashment attracts PF.

Pon

kprasoon

No PF deductions on EL Encashment. Leave encashment should not be taken as wages for the calculation of Provident Fund (PF) contributions/deductions. This has been applicable since March 2008, following the Supreme Court judgement in Manipal Academy for Higher Education Vs. PF Commissioner.

For your reference, please go through the attached circular issued by the EPFO.

Regards,
Kamal

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