Understanding PF Calculation: Do We Include Other Allowances When Basic Is Below 15,000?

Hi, I have a question regarding PF. For PF calculation, we consider 12% of basic + DA and the higher limit is Rs 1800 as PF contribution. But if the basic is less than Rs. 15,000 and 12% of basic is less than 1800, then do we consider PF gross, which is basic + DA + other allowance? If yes, what all is included in other allowance? Any help and answers are welcome.

Regards, Neelam

It should be remembered that EPF's calculation is always done based on Basic salary + D.A. or V.D.A., whether an employee's basic salary is equal to the ceiling limit of Rs. 15,000 or less.

Regards, Amit

Hi,

Please understand that you cannot have different procedures for different categories of employees. Secondly, PF will be contributed on Basic + DA only, and if this amount is below ₹15,000, then PF should be contributed on actuals. Additionally, you can contribute over and above the limit of ₹1,800 if the company management allows for the same.

I want to know if PF deduction is capped at Rs. 15,000 and an employee worked only 20 days in a particular month. If his basic salary exceeds Rs. 15,000, then is PF calculated on Rs. 15,000 or do we have to proportionate Rs. 15,000 over 20 days?

You have to remit EPF contribution on Rs 10,000 @ 12% calculated on a pro rata basis - 15,000 / 30 x 20.

Dear All,

Thank you for the valuable inputs; it really helped. @manojkamble, when you say "if basic is less than 15,000/- then PF to be contributed on actual's," what does that mean? Please elaborate.

Regards,
Neelam Mahara