Understanding PF Contributions
My question is related to PF contributions. If an employee's basic pay is:
- Basic pay: 34,000
- Then PF contributions to the employee's side are 12% = 4,080
- The employer contribution is divided into two parts: EPF 8.33% and PF 3.67%.
- Total employer-side contribution = 12%.
I cannot understand these two parts of employer-side contributions. Please explain to me in detail where the employer contribution money is deducted.
Thanks,
Anjna
From India, Chandigarh
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8My question is related to PF contributions. If an employee's basic pay is:
- Basic pay: 34,000
- Then PF contributions to the employee's side are 12% = 4,080
- The employer contribution is divided into two parts: EPF 8.33% and PF 3.67%.
- Total employer-side contribution = 12%.
I cannot understand these two parts of employer-side contributions. Please explain to me in detail where the employer contribution money is deducted.
Thanks,
Anjna
From India, Chandigarh
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Understanding PF Contributions
PF contribution made by employees is 12% of the basic salary; the entire amount goes to the employees' PF account. On the other hand, the PF contribution made by the employer is also 12%, where 8.33% is allocated to the Employee Pension Fund, and the remaining 3.67% goes to the PF account. Therefore, both the employee and the employer contribute 12% each.
I hope this explanation clarifies the contribution details for you.
Thank you,
Vikram
From India, Pune
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PF contribution made by employees is 12% of the basic salary; the entire amount goes to the employees' PF account. On the other hand, the PF contribution made by the employer is also 12%, where 8.33% is allocated to the Employee Pension Fund, and the remaining 3.67% goes to the PF account. Therefore, both the employee and the employer contribute 12% each.
I hope this explanation clarifies the contribution details for you.
Thank you,
Vikram
From India, Pune
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[QUOTE=vikkybhati07;1513584]
PF Contribution Made by Employees:
12% of basic, the entire amount goes to the employees' PF account.
PF Contribution Made by Employer:
12% i.e., 8.33% goes to the Employee Pension Fund and the remaining 3.67% goes to the PF account.
So, the employee and employer contribute 12% each. Hope you understand.
It should be noted that 8.33% towards EPS is subject to the ceiling of only Rs. 540/-. For employees whose basic + DA is more than 6500, the contribution made by the employer directly goes to the employees' PF account other than the mandatory Rs. 540/- to EPS.
Regards,
Vikram
From India, Lucknow
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PF Contribution Made by Employees:
12% of basic, the entire amount goes to the employees' PF account.
PF Contribution Made by Employer:
12% i.e., 8.33% goes to the Employee Pension Fund and the remaining 3.67% goes to the PF account.
So, the employee and employer contribute 12% each. Hope you understand.
It should be noted that 8.33% towards EPS is subject to the ceiling of only Rs. 540/-. For employees whose basic + DA is more than 6500, the contribution made by the employer directly goes to the employees' PF account other than the mandatory Rs. 540/- to EPS.
Regards,
Vikram
From India, Lucknow
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