How to Calculate PF for an Employee with Absences and a ₹15,000 Ceiling Limit?

Hi friends,

One employee's fixed PF wages are ₹26,000 per month. We have set the PF ceiling limit at ₹15,000. He was absent for 5 days. How much should the PF amount be in this case? Should it be ₹1,800 (i.e., on ₹15,000) or ₹1,500 (i.e., on ₹12,500)? Please guide.

As he has drawn more than Rs 15,000, the PF contribution has to continue on the same basis (for Rs. 15,000). Unless the salary goes below Rs. 15,000, the contribution has to be maintained at the same level.

EPF wages for 26 days if fixed at 15,000, then the amount earned based on the number of days worked will be taken into consideration.

But can we maintain two basics; one actual as per the appointment letter and another for PF calculation purposes, i.e., 15000 as per capping.

An appointment letter defines compensation mentioned for the employee. The actual basic considered for all statutory reasons and compliance is what your employer mentions during contribution on the portal. EPF will also consider the amount of basic shown in ECR. For more details, please refer to the meaning of wages under EPF Act. EPF wages are derived based on this definition for statutory compliance.