Hi Folks,
I understand EDLI is calculated based on 0.5% of PF Actual Salary (if salary exceeds Rs. 6500 then Rs. 6500 will be considered as PF Actual Salary). I have a doubt only in the Rounding rule. Based on my understanding, the Rounding rule for EDLI is to the nearest Rupee.
My doubt is where do we need to apply the rounding rule:
(a) at the employee level (or)
(b) at the sum of PF Actual wages level.
Example: If I have 4 employees whose PF actual wages are Rs. 5800, Rs. 6500 (2 employees), and Rs. 5483.
Method (a) -->
0.005 * 5800 = 29
0.005 * 6500 = 33 (32.5 rounded to 33)
0.005 * 6500 = 33
0.005 * 5483 = 27.415 - round to 27
Total = 122
Method (b) -->
0.005 * (5800 + 6500 + 6500 + 5483) = 121
Because we will get 2 different values based on the above approaches. Currently, we are doing it at the employee level. It looks like statutory-wise this is wrong. Can anyone help to clarify this?
Thanks & Regards,
Arun
From India, Bangalore
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I understand EDLI is calculated based on 0.5% of PF Actual Salary (if salary exceeds Rs. 6500 then Rs. 6500 will be considered as PF Actual Salary). I have a doubt only in the Rounding rule. Based on my understanding, the Rounding rule for EDLI is to the nearest Rupee.
My doubt is where do we need to apply the rounding rule:
(a) at the employee level (or)
(b) at the sum of PF Actual wages level.
Example: If I have 4 employees whose PF actual wages are Rs. 5800, Rs. 6500 (2 employees), and Rs. 5483.
Method (a) -->
0.005 * 5800 = 29
0.005 * 6500 = 33 (32.5 rounded to 33)
0.005 * 6500 = 33
0.005 * 5483 = 27.415 - round to 27
Total = 122
Method (b) -->
0.005 * (5800 + 6500 + 6500 + 5483) = 121
Because we will get 2 different values based on the above approaches. Currently, we are doing it at the employee level. It looks like statutory-wise this is wrong. Can anyone help to clarify this?
Thanks & Regards,
Arun
From India, Bangalore
Acknowledge(0)Amend(0)
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf