Provident Fund Calculation for Mid-Month Joining
In the case of mid-month joining, leaving, absences, or transfer scenarios, how should the Provident Fund (PF) be calculated?
For example, if an employee's gross salary is ₹20,000 per month and they join on the 15th of April 2013, they are eligible for ₹10,000 for that month. So, PF for 30 days is ₹780. However, since the employee joined on the 15th of April, their PF is calculated as ₹780/30 = ₹26 per day, which amounts to ₹26 * 15 = ₹390.
Is the above calculation correct? My client insists that even if the employee's basic salary is more than ₹6,500 after mid-joining, a flat deduction of ₹780 must be made and proration should not be considered.
Can this legally happen?
Regards,
Chandu
From India, Hyderabad
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In the case of mid-month joining, leaving, absences, or transfer scenarios, how should the Provident Fund (PF) be calculated?
For example, if an employee's gross salary is ₹20,000 per month and they join on the 15th of April 2013, they are eligible for ₹10,000 for that month. So, PF for 30 days is ₹780. However, since the employee joined on the 15th of April, their PF is calculated as ₹780/30 = ₹26 per day, which amounts to ₹26 * 15 = ₹390.
Is the above calculation correct? My client insists that even if the employee's basic salary is more than ₹6,500 after mid-joining, a flat deduction of ₹780 must be made and proration should not be considered.
Can this legally happen?
Regards,
Chandu
From India, Hyderabad
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EPF contribution is calculated based on the actual amount paid (basic + DA or a ceiling of 6500/-). There is no fixed amount to be contributed to the EPF. Your calculation is absolutely correct.
Thanks,
Kamal
From India, Pune
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177EPF contribution is calculated based on the actual amount paid (basic + DA or a ceiling of 6500/-). There is no fixed amount to be contributed to the EPF. Your calculation is absolutely correct.
Thanks,
Kamal
From India, Pune
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PF CHALLAN & CALCULATION SHEET.xls