How Should PF Deductions Be Calculated for Mid-Month Joiners? Seeking Advice!

Hi Everyone, Please help me with my query: One employee has a basic salary of 50,000 per month, and the PF deduction is a maximum of Rs. 1800 (based on the mandatory limit of 15,000). This employee joined us on the 16th day of the month, so their pay days will be for 15 days. The basic salary for this month will be 25,000.

The employee's PF deduction for the month should be calculated as follows: (1800/30) * 15 days = 900 or 1800 in full.

Should the PF deduction be on a pro-rata basis as per the total number of days worked, or should it be based on the basic salary and allowances irrespective of the days worked?

Thank you for your assistance.

Dear Neha San,

As per your query, PF deduction will be calculated based on paid days. If an employee's paid days are 15, then the PF contribution will be 900, as per the calculation you shared: (1800/30) * 15 days = 900

Thanks,
Sushil Chaudhary
[Phone Number Removed For Privacy-Reasons]

EPF Act 1952: PF Contribution Guidelines

As per the EPF Act 1952, PF contribution is payable on the actual salary earned at 12%, subject to a ceiling of Rs. 15,000/-. Since the actual salary of the month has exceeded Rs. 15,000/-, a contribution of Rs. 1,800/- has to be remitted. Any willful default in this carries a penalty, interest, and even criminal prosecution. So, it is a serious matter.