Confused About PF Deductions? Why My Calculations Don't Match the Online Balance

Dear All, can anyone clarify this?

PF Deductions Overview

My PF deductions per month are as follows:
- EE: 1920
- ER: 1920
- Total: 3840 x 12 = 46080/-

According to my calculations, my PF account should have Rs. 46080 for 2013-2014. However, when I checked my online PF balance, it shows Rs. 36376 up to March 2013.

What was your date of joining? I think the PF that you checked goes up to February 2014 (because the PF return period is from March to February only). Please check.

Regards,
Mukesh Kumar

Though I am not well-versed in deductions and deposits concerning EPF contributions, I have read that 8.33% of the employer's share of contribution under the EPF & Misc. Provisions Act, 1952, goes to the account of the Employees' Pension Scheme, 1995. Only the balance amount (3.67%) goes to the credit of the Employees' Provident Fund Account of the concerned employee.

In addition, there may be a possibility that the employer is only depositing his share of contribution up to a maximum statutory limit of Rs. 541/-.

I hope seniors or experts who are actually attending to the deductions, deposits, or yearly statements part of EPF contributions in their units may clarify the position.

Thank you.

Your method of calculation is not in accordance with the EPF scheme. Mr. Harsh Kumar Mehta has explained it to you. Still, I am elaborating on the calculations.

1. Assuming that your salary will be Rs. 15,000 per month, inclusive of Basic and D.A.

2. Then your contribution for Provident Fund will be 12.0% of your Salary = Rs. 1800.00 per month, assuming that there is no ceiling on your contribution. This amount will be directly credited to your Provident Fund Account.

3. Coming to your Employers' contribution of Rs. 1800.00, which is equal to your contribution, it will be split into two accounts. One part will go to EPS (Pension), and the other part will go to your Provident Fund account. Allow me to explain with an example.

4. Your employer's contribution of Rs. 1800.00 will be split as follows: The pensionable salary is fixed at Rs. 6500 per month presently. On this, 8.33% will go to your pension account (for which the Government will not provide any details), and the remaining 3.67% will be credited to your Provident Fund account.

Hence, the total contribution towards the Provident Fund will be Rs. 1800 + 1259 = 3059 (both employees' and employers'). The employer's contribution of Rs. 541 will directly go to the pension account. This accumulated amount will be paid by the EPFO only after you attain the age of 58 years, regardless of any contribution, as fixed and stipulated in the Employees Pension Scheme, 1995. Although the financial year is from April to March, your contribution will be from March to February as the contributions are deposited for the succeeding month. You will receive interest on your Provident Fund accumulation separately for employees and employers every year, and you will receive an annual statement in Form 23 after your employer submits the Annual Return in Form 6.

I hope I have clarified any doubts you had about the calculation.

Regards,
Adoni Suguresh

Sr. Executive (Pers, Admin & Ind. Rels) Rtd
Labour Laws Consultant

Mr. Adoni has rightly clarified the query. Moreover, the amount contributed towards EPS does not bear any interest, and it is settled at the time of reimbursement based on the length of service and the last average contribution. Importantly, EPS contributions are not reflected in the EPF accumulation slips.

Regards