How to Calculate PF Deduction for Partial Month Work: Seeking Guidance from Seniors

Dear Seniors,

If an employee has a Gross Salary of Rs. 40,000 and Basic is Rs. 20,000, the PF Salary is considered as the ceiling wage of Rs. 15,000, so that his monthly deduction is Rs. 1,800. In a given month, he worked only for 15 days, and the rest of the month is without pay (LOP). Therefore, his Gross Salary is Rs. 20,000, and Basic is Rs. 10,000.

How is the PF calculated? Is it a constant amount of Rs. 1,800 or Rs. 1,200 (12% of Rs. 10,000)?

Please guide me.

Dear U S Sharma,

I have heard about a new amendment regarding PF. It has come to my attention that the EPF employer contribution has been changed to 8.33% for new joining employees who joined from 01-08-2016. This information is crucial and requires immediate attention.

Regards,
Pandarinath
9705444419

Recruitment of fresh employees with some formalities will entitle an employer to claim back 8.33% of the employer's EPS share, so the net effect on the employer would go as low as 3.67% under PMRPY scheme. However, there are restrictions and formalities to maintain. Look at this link https://www.citehr.com/573272-pmrpy-...issue-pg2.html.

Dear Member,

During times of fewer working days, earnings may decrease, but this does not mean that PF contributions will be calculated on the gross amount. When the basic salary is considered as Rs 15,000, the calculation will also be based on the number of working days at Rs 15,000 only.

The calculations of PF are done based on the actual number of pay days. In the case of LOP of 15 days, the final calculated amount (for the full month) will be prorated for the 15 days worked. So the short answer is 'It is not constant' in the case of LOP.

Hope this clarifies.

Dear Seniors,

I am still confused as I have received two different answers here as well. If possible, please provide clarification with support.

Thank you.

Earned wages are eligible for EPFO contribution. Deduct Rs. 1200 from Rs. 10,000.

Thank you!