PF Deductions On Notice Pay - URGENT

Dear All
pls can anybody help me out and tell me if PF will be deducted on the Notice pay being given on relieving an employee.
regards
Neelam

Notice pay depends again your pay structure, normally notice pay is only basic, if one or two month basic pay is paid as notice pay obviously it attracts PF and ultimately it is your money only.
Shiva Kumar H

Dear Mr. Shiva
WE are paying 1 month basic + project allowance to employees being retrenched..
so we'll be paying them :
Notice pay (1 Month Basic + Project Allowance)
15days/yr retrenchment benefit
so PF will be deducted on basic amount.
is that correct

If you are paying for the notice pay, you will deduct PF on that. If you are not paying notice pay, then you are not paying him anything hence no PF can be deducted.
Regards,
Nilendra

Dear Nilendra
Greetings.
If we are ready to pay Notice pay, then whether it is for one month basic salary + DA, or one month gross salary
Please clarify the amount
Cheers
Trisha
HR Professional

Dear Trisha,
One month Notice Pay means one month salary. you will have to see if one month salary in lieu of notice pay has been defined or not in the appointment letter.
If it is not defined then one month salary in all parlance means total gross salary for the month because salary means Basic+All Allowances.
Regards,
Nilendra

You are absoutely correct, pf has to be recovered only on basic and DA if terms of employement expressed, otherwise only on basic, i feel whatever your are doing id correct
Shiva Kumar H

Dear all,
Here I have one doubt. If pf will be deducted on notice pay then,
what is the terms against noticepay paid by the employees?
with regards,
R Shanti

Dear Shanti
Greetings.
If the notice pay is paid by the employee, it cannot be regarded as salary but as a amount returned as advance, hence PF cannot be recovered on this amount.
Cheers
Trisha
HR Professional

Dear All,
Few clarification regarding this:
If the employee serves the notice period then he will get his normal salary for the month and hence, PF will be deducted in normal course of business.
If the employee does not serve the notice pay:
If he leaves on 17th and notice pay is for one month then he will forfiete salary for that month. That is, his attendance for that month will be treated as zero. For the balance no. of days (13 days) during the full and final settlement the salary for 13 days will be adjusted. This means that if he is to get certain amount from the company in the mode of OSF recovery, leave encashment etc. this amount for 13 days will be adjusted. if he has to pay the company some amount in the form of loan taken and any other due then this amount of 13 days will be added in it and will come as a full and final settlement amount.
Hence, PF will not be recovered in this case.
Regards,
Nilendra