Understanding PF Contributions: Can We Calculate 12% on a Basic Salary Over ₹15,000?

Dear Sir, For example, an employee's gross salary is ₹30,30,000.00 per annum, and his gross salary per month is ₹2,52,500. Now, the basic salary is ₹1,26,250/-, HRA is ₹50,500, and the Special Allowance is ₹75,750. Can we calculate PF contribution on the actual basic of ₹1,26,250/- at 12% for both the employee and employer? Please clarify.

EPF Contributions on Gross Salary

Why not? You can pay contributions to EPF even on the gross salary, i.e., Rs 2,52,500. The employer can also contribute the same amount as is contributed by the employee. However, when the contribution by the employer is bifurcated, you have to make only Rs 1,250 to the Pension Fund, and the rest can be put in EPF. Obviously, if the employee is not someone who joined prior to September 2014 or is not an existing member of the Pension Fund, no contribution can be made to the Pension Fund. In such cases, the entire share of the employer should be put in the Provident Fund alone.