Regarding EPFO: If an employee joins mid-month and/or has absenteeism leading to loss of pay, then while calculating EPF for Employee and Employer should it be on the basis of CTC or on Fixed Gross?
For example, suppose an employee has 30k per month as CTC, and the Employee EPF amount is fixed at a statutory ceiling of Rs 1800 per month leading to a fixed gross of Rs 28,200. Then the total EPF Deduction (Employee+Employer) is Rs 3600.
If they have attended for only 50% of the payroll period, then if CTC becomes Rs 15k per month and Employee EPF becomes Rs 1692 per month leading to a fixed gross of Rs 14,100, the Employer EPF becomes Rs 900 which does not match the Employee EPF.
If the Employer EPF has to increase, then the Fixed Gross will be reduced keeping CTC constant. So in this situation, what should be done?
My scenarios are:
1. Employer pays only Rs 900
2. The CTC is kept fixed and a recalculation is done to ensure Employee and Employer contribution matches leading to 50% CTC but <50% fixed gross
3. Employer pays the extra EPF from out of their own pocket as an additional cost
Which is the proper recourse out of these three scenarios?
For example, suppose an employee has 30k per month as CTC, and the Employee EPF amount is fixed at a statutory ceiling of Rs 1800 per month leading to a fixed gross of Rs 28,200. Then the total EPF Deduction (Employee+Employer) is Rs 3600.
If they have attended for only 50% of the payroll period, then if CTC becomes Rs 15k per month and Employee EPF becomes Rs 1692 per month leading to a fixed gross of Rs 14,100, the Employer EPF becomes Rs 900 which does not match the Employee EPF.
If the Employer EPF has to increase, then the Fixed Gross will be reduced keeping CTC constant. So in this situation, what should be done?
My scenarios are:
1. Employer pays only Rs 900
2. The CTC is kept fixed and a recalculation is done to ensure Employee and Employer contribution matches leading to 50% CTC but <50% fixed gross
3. Employer pays the extra EPF from out of their own pocket as an additional cost
Which is the proper recourse out of these three scenarios?