EPF contribution query in case of LWP

I am writing to seek clarification on EPF calculations based on the PF Wages limit, which is 15,000/- per month at present as illustrated below.

A member's basic wage + all allowances (except HRA) is Rs.16,506/- per month.
His monthly PF calculated as 15000*12% = Rs.1800

Example - In the month of September' 22, this member gets 29 days wages due to one day without pay ( loss of without pay) .

His earned basic wage is 16,506/30*29 days = Rs. 15,956/-

What should be his EPF Contribution?

Option 1 : 12% on his earned basic of Rs.15,956 i.e on 15000*12% = Rs.1800/-

or

Option 2 : 12% on his earned PF Wages calculated as (15000/30*29 days) = Rs.14,500/- i.e on 14500*12% = Rs.1740/-

We are paying PF Contribution always on 15,000/- but in case of without pay leave contribution done according EPF Wages ceiling upto 15,000/- only ( 15,000/ particular month * no of payable days)

Please give me some advice on which option out of the above is correct?
We need to clarify the same to one of our clients with documentary evidence.

Thank you
Regards
Dwarika P Nautiyal

If, for the purpose of PF contributions, your Salary is Rs 15000, the loss of pay should be on this 15000. Therefore, your second option should be followed in LOP cases.

So long employee earns more than 15000/- per month, the contribution should be on 15,000/- . Only when the earning will be below 15,000/- per month, then only it will be on actual.

PF has not been mentioned any where PF Wages is 15,000/- rather it has been restricted to make payment up to 15,000/- where the organizations are interested to follow the ceiling limit. There are employers who are paying above the ceiling limit and in those cases the contribution will be after adjusting the LWP i.e on actual PF gross after adjusting LWP. But the PF gross of any employee is more than 15,000/- per month and after LWP the same is above 15,000/- per month, at the same time employer is paying PF contribution up to ceiling limit , then the PF contribution should be on 15,000/-.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
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