Understanding PF Calculation: How Do We Calculate It with a Basic Salary of 13,000 and DA of 2,000?

Please help me understand how we can calculate PF for a person with a basic salary of 13,000 and a DA of 2,000 post the new wage ceiling.

Regards

Dear sirs, please clarify if the Administrative Charges of 1.1% will be calculated on the Basic amount with an employer ceiling of Rs. 6500/- (now 15000/-) or on the full basic amount without an employer ceiling limit.

Regards, Ansari, Bangalore

Dear Khemchauhan & Ansari, please find the calculation:

Employee Contribution
- 12% on 15,000 = 1,800

Employer Contribution
- EPS: 8.33% on 15,000 = 1,249.5
- EPF: 3.67% on 15,000 = 550.5
- EDLI charges: 0.5% on 15,000 = 75
- EPF Admin charges: 1.1% on 15,000 = 165
- EDLI Admin charges: 0.01% on 15,000 = 1.5 (rounded off to 2).

Please let me know if you need any clarification.

Thanks & Regards,
T. Prathap
HR Executive
Human Resource Department
R L Jalappa Narayana Heart Centre
Mobile: [Phone Number Removed For Privacy Reasons].

Mr. Prathap, Thanks for the information. However, one should seek more clarity on this. Suppose someone is receiving a salary of 25,000 (basic + DA), how should the breakdown mentioned by you be calculated? Please clarify the confusion as the employer may contribute up to a maximum ceiling of 15,000, in addition to (3.67).

Calculation Breakdown

Please correct if it is wrong:
• Employee Contribution - 12% on 25,000 = 3,000
• Employer Contribution - EPS - 8.33% on 15,000 = 1,249.5
• EPF - 3.67% on 25,000 = 917.5
• EDLI charges - 0.5% on 15,000 = 75
• EPF Admin charges - 1.1% on 15,000 = 165
• EDLI Admin charges - 0.01% on 15,000 = 1.5 (rounded off to 2).

Your earliest response will be highly appreciated.

Thanks & Regards,
Dillip Ku. Nayak
[Phone Number Removed For Privacy Reasons]

All contributions should be on Basic + DA, i.e., Rs. 25,000/- except for EPS (Ceiling is Rs. 15,000/-).

Regards,
Jitender.

Thank you for the great discussion. My post is a slight digression on the topic, but I have been trying to clarify this question from the local PF department for a long time. Given my repeated questioning, I have become a joke there, and the PF staff (who are actually busy) are getting irritated with me. So please respond to my queries as best as possible, at your leisure. Please note this is not a priority, and you can continue with the wage ceiling discussion and respond to this when you have time.

Query Regarding Withdrawal

Assume the above scenario given by Mr. Prathap. I understand that there are three contributions given to the PF office in the name of the employee: 12% of (Basic+DA) by the employee, which is known as Employee Contribution; Employer contribution EPS = 8.33% of (Basic+DA) and EPF - 3.67% of (Basic+DA).

I apply for withdrawal:

- **Scenario 1:** What amount do I get if I apply for withdrawal without opting for a scheme certificate (that is leaving the box in option 8 of Form 10(C) unchecked)?

- **Scenario 2:** What amount do I get if I apply for withdrawal by opting for a scheme certificate (that is leaving the box in option 8 of Form 10(C) CHECKED)?

I understand that the actual amount would be less, as there would be charges such as EPF Admin, etc., as mentioned in the above case.

(I got completely confused by the explanation of an annual cap of Rs 6500 per year, which would go into the Pension fund, etc. And this is the amount that would actually be used to pay a pension if I opt for the scheme certificate, etc. PF office employees are getting frustrated when I ask anything about whether this Rs 6500/- per year would also get credited if I don’t opt for the scheme certificate, etc.)

I would highly appreciate if folks can clarify.

Another Question

Form 10(C) is used for withdrawal. Why am I being asked to fill Form 19? Not that I have an issue in filling Form 19.

Thanks for your valuable inputs.

Regards,
Raghav

Hyderabad

Barkatpura PF Office

Appended are the details requested by you:

Scenario 1 - Withdrawal Without Scheme Certificate

What amount do I get if I apply for a withdrawal without opting for a scheme certificate (leaving the box in option 8 of Form 10(C) unchecked)?

➡️ You will get the full accumulation (24% on your basic + DA).

Scenario 2 - Withdrawal With Scheme Certificate

What amount do I get if I apply for withdrawal by opting for a scheme certificate (leaving the box in option 8 of Form 10(C) checked)?

➡️ 8.33% or 541 per month, whichever is less, will be retained by the PF department, and a Scheme Certificate will be issued to you. (Please read the guidelines carefully mentioned in Form 10C attached).

I understand that the actual amount would be less due to charges such as EPF Admin, as mentioned in the above case.

➡️ All these charges are additionally contributed by your employer and are neither accumulated in your account nor withdrawable.

(I got completely confused by the explanation of an annual cap of Rs 6500 per year, which would go into the Pension fund, etc. This is the amount that would actually be used to pay a pension if I opt for a scheme certificate, etc. PF office employees are getting frustrated when I ask anything about whether this Rs 6500 per year would also get credited if I don’t opt for a scheme certificate, etc.)

➡️ As the ceiling of EPS was Rs. 6500 per month, and 8.33% of this 6500 would be 541 per month and an annual Rs. 6500. So at the end of the year, the total accumulation in your EPS account would be Rs. 6500 if your Basic + DA is Rs. 6500 or more than that.

I would highly appreciate it if folks can clarify. Another question - Form 10(C) is used for withdrawal. Why am I being asked to fill Form 19? Not that I have an issue in filling Form 19.

➡️ Both forms are used to withdraw funds from different schemes of PF (i.e., EPF and EPS).

Regards,
Jitender

Now everything has become crystal clear. The trick is 8.33% or Rs 541, which is "lower," would be kept aside for creating a pension fund for me. I should have searched CiteHR forums before and saved much time. I have a few more queries which are related:

Queries Regarding PF Balance

(1) When I go to the PF office and ask for the balance in my account, they show me two values - one for Employer and one for Employee. Both don't match. The Employee contribution number is higher. I can guess - the answer could be that part of it is the Rs 541 per month, which is not being shown when I ask for balance, is actually taken from the Employer contribution. Also, if I opt for a complete withdrawal (without a Scheme certificate), I would get even this "amount," which is not being "shown" to me in the balance when I ask. So the total amount that I would get would be invariably higher than what I'm given as a balance in the PF office.

(2) I also came to know from the PF office that inoperative accounts have stopped attracting/accumulating interest from Y-2011. So, if you have an old account, either link it or withdraw the monies. As unlike earlier days, the account would basically be inoperative.

Thanks for the patience and time. My primary queries have been answered, and these are just to clarify. I would appreciate if I get responses to these too.

Thanks, CiteHR community!

Regards,
Raghav

Dear Sarweshwar,

Calculation of PF Contributions

Employee Contribution - 12% on 15,000 = 1,800

Employer Contribution:
- EPS - 8.33% on 15,000 = 1,249.5 (round off to 1,250)
- EPF - 3.67% on 15,000 = 550.5 (round off to 551)

EDLI Charges - 0.5% on 15,000 = 75

EPF Admin Charges - 1.1% on 15,000 = 165

EDLI Admin Charges - 0.01% on 15,000 = 1.5 (round off to 2)

Basic Salary Below 15,000/-

Suppose Basic Salary is 10,000/-:

Employee Contribution - 12% on 10,000 = 1,200

Employer Contribution:
- EPS - 8.33% on 10,000 = 833
- EPF - 3.67% on 10,000 = 367

EDLI Charges - 0.5% on 10,000 = 50

EPF Admin Charges - 1.1% on 10,000 = 110

EDLI Admin Charges - 0.01% on 10,000 = 1

Basic Salary Above 15,000/-

It is not mandatory to deduct PF, but it is a mutual understanding between the employee and employer. If both agree, you can follow:

Suppose Basic Salary is 20,000/-:

Employee Contribution - 12% on 20,000 = 2,400 or Employee Contribution - 12% on 15,000 = 1,800

Employer Contribution:
- EPS - 8.33% on 15,000 = 1,249.5 (round off to 1,250)
- EPF - 3.67% on 15,000 = 550.5 (round off to 551)

EDLI Charges - 0.5% on 15,000 = 75

EPF Admin Charges - 1.1% on 15,000 = 165

EDLI Admin Charges - 0.01% on 15,000 = 1.5 (round off to 2)

I hope I clarified your doubt. Please let me know if you need any clarification.

Thanks & Regards,

T. Prathap, HR Executive, Human Resource Department, R L Jalappa Narayana Heart Centre, [Email Removed For Privacy Reasons], Mobile: [Phone Number Removed For Privacy Reasons].

We have a doubt. For an executive with a basic salary + DA = 26,000, we were deducting an employee contribution of 780 and an employer contribution of 780 until 31-08-2014. With the revised ruling effective from 1-9-2014, can we cap the employee contribution at 1,800 and the employer contribution at 1,800? Incidentally, the employee thinks that we should not change the contributions from 780 to 1,800. Is this correct?

Thanks,
Leela

With reference to your query, for the employee whose Basic + DA is 26,000, as you mentioned, both Employee and Employer Contributions can be limited to 1,800 (i.e., 12% on 15,000). Some companies will deduct the employee's contribution at 12% on Basic, irrespective of the wage ceiling limit. Therefore, the Employee Contribution would be 12% on 26,000 = 3,120/-. However, the Employer contribution remains the same at 1,800/-.

I hope I clarified your doubt. Please let me know if you need any clarification.

Thanks & Regards,

T. Prathap
HR Executive
Human Resource Department
R L Jalappa Narayana Heart Centre
Email: [Email Removed For Privacy Reasons]
Mobile: [Phone Number Removed For Privacy Reasons].

Example:

What is the PF when an employee is earning a basic salary of Rs. 10,000, Rs. 1,500 (conveyance allowance), and Rs. 3,000 (medical allowance)?

Salary = Basic Salary + Dearness Allowance (DA)
Salary = 10,000 + 1,500 + 3,000
Salary = 14,500 (> Rs. 6,500)

So, PF = 12% * 14,500
PF = Rs. 1,740

In this case, the employee is only liable to pay 12% * Rs. 6,500 = Rs. 780. The remaining amount, which comes out to be Rs. 960, is the employee's choice to pay or not to pay.

Example taken from: PF Calculator - https://www.easycalculation.com/mort...calculator.php

Dear all,

Could you please provide the revised PF admin charges along with the account details?

Regards,

Madesh M
Cavinkare Pvt Ltd

Dear Friends,

Would you please explain whether to pay PF for the employees whose salary is below Rs. 15,000/- (Basic+DA) as per the new PF wage ceiling?

Thanking you,
Bhupathi

Dear Bhupa,

It is mandatory to cover all the employees whose Basic+DA is less than 15000/-. For those with Basic+DA exceeding 15000/-, coverage under PF is optional at the time of joining. However, if an employee is already covered under PF and their Basic+DA is over 15000/-, we cannot prevent them from being covered.

Hope your doubt is clarified.

T. Prathap Senior Executive-HR 9491771437

Dear All,

Now the Admin charges for EPF have been reduced from 1.10% to 0.85%. So, the employer's contribution is 13.36% instead of 13.61%.

FYI