Confused About PF Deductions? Clarification Needed on Prorating Contributions

As per my knowledge, there are 2 types of PF deductions. First, 12% of basic & minimum contribution which is 12% of 15000 (PF wages). Currently, I'm prorating the 1800 contribution. For example, if the number of days paid is 18 for December, then 1800 x 18/31 = 1045.

I need clarification on the above. One of my friends informed me that if the basic is more than 15000, then there is no need for proration for 1800, irrespective of the number of days.

Hi Mr. Vishwas,

Basic is one of the components of wages and is determined as a certain percentage of the total wages. For example, if an employee's salary is 14,000 Rs and their Basic is 50% of the salary, then Basic is 7,000 Rs. If an employee is paid for 15 days, then their salary is (14,000*15/31) Rs 6,774, and the Basic at 50% is (6,774*50%) Rs 3,387. Hence, you have to calculate the PF contribution for Rs 3,387.

With Regards,

Mr. Thumbs Up