Dear All,
In case an employee has worked for 17 days in a month and taken leave for the rest period, then on what amount of (Basic+DA+RA) should Provident fund liability be calculated? Should it be based on the actual salary of 17 days or the total of 30 days? Also, is there any provision where in such cases where an employee didn't work for the whole month, the limit of 6500 should be reduced on a pro rata basis for comparison?
From India, Delhi
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In case an employee has worked for 17 days in a month and taken leave for the rest period, then on what amount of (Basic+DA+RA) should Provident fund liability be calculated? Should it be based on the actual salary of 17 days or the total of 30 days? Also, is there any provision where in such cases where an employee didn't work for the whole month, the limit of 6500 should be reduced on a pro rata basis for comparison?
From India, Delhi
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Dear Jain,
First of all, the contribution under various welfare legislations is to be remitted based on the actual earned wages and not on assumed monthly wages. For EPF, it is subject to the employer's obligation on the ceiling of wages of Rs. 6500. In case of leave without pay during the month, no deduction or remittance shall be effected.
Thank you.
From India, Mumbai
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96First of all, the contribution under various welfare legislations is to be remitted based on the actual earned wages and not on assumed monthly wages. For EPF, it is subject to the employer's obligation on the ceiling of wages of Rs. 6500. In case of leave without pay during the month, no deduction or remittance shall be effected.
Thank you.
From India, Mumbai
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Dear Harshit,
PF should be deducted based on the employee's basic earnings. For example, if Mr. X works for 17 days and the rest are unpaid leave days, the deduction should be calculated based on the 17 days' earned basic pay. If it is a paid leave, then the deduction should be based on the full 31 days' earned basic pay, similar to receiving a full salary.
Thank you.
From India, Mumbai
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PF should be deducted based on the employee's basic earnings. For example, if Mr. X works for 17 days and the rest are unpaid leave days, the deduction should be calculated based on the 17 days' earned basic pay. If it is a paid leave, then the deduction should be based on the full 31 days' earned basic pay, similar to receiving a full salary.
Thank you.
From India, Mumbai
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Dear Jain,
I feel that the contribution cannot be on a pro-rata basis for the days of work but for the total earned wages for the month. For the given example of 17 days of work, the calculation may be as follows:
A) If the salary for the period of 17 days is less than or equal to Rs. 6,500, the contribution is to be paid on the total amount of salary;
B) If the salary exceeds Rs. 6,500, the contribution should be restricted to the wage ceiling of Rs. 6,500.
However, learned seniors may please comment.
Regards
From India, Mumbai
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I feel that the contribution cannot be on a pro-rata basis for the days of work but for the total earned wages for the month. For the given example of 17 days of work, the calculation may be as follows:
A) If the salary for the period of 17 days is less than or equal to Rs. 6,500, the contribution is to be paid on the total amount of salary;
B) If the salary exceeds Rs. 6,500, the contribution should be restricted to the wage ceiling of Rs. 6,500.
However, learned seniors may please comment.
Regards
From India, Mumbai
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If any employee's PF is not once, you cannot deduct PF if his earnings go down due to leave. If any employee works for 17 days, naturally his basic earnings go down. This does not mean you can start deducting PF.
From India, Mumbai
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From India, Mumbai
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As rightly said by Mr. Premkumar, if the basic salary of the employee for 17 days' earnings is less than or equal to Rs. 6500/-, then the employer's PF contribution will be based on the actual amount. However, if the basic salary of the employee for 17 days' earnings is more than Rs. 6500/-, then the employer's PF contribution will be restricted up to Rs. 6500/- of basic pay due to the cap.
From India, Ahmadabad
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From India, Ahmadabad
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Dear Mr. Harshit,
It seems that you are not reading the post carefully or you are not understanding it clearly. With regards to your query, if the employee has not worked for the full month and if it is on LOP, then the Basic will be NIL. So, how can you contribute towards PF? Please explain.
From India, Ahmadabad
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It seems that you are not reading the post carefully or you are not understanding it clearly. With regards to your query, if the employee has not worked for the full month and if it is on LOP, then the Basic will be NIL. So, how can you contribute towards PF? Please explain.
From India, Ahmadabad
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Sir,
In case an employee has worked for part of the month and earned a basic for part of the month, let's say Rs. 6000. Assuming the organization contributes PF based on the ceiling limit, will the ceiling limit of Rs. 6500 be reduced on a pro-rata basis for the part month for comparison with earned wages?
From India, Delhi
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In case an employee has worked for part of the month and earned a basic for part of the month, let's say Rs. 6000. Assuming the organization contributes PF based on the ceiling limit, will the ceiling limit of Rs. 6500 be reduced on a pro-rata basis for the part month for comparison with earned wages?
From India, Delhi
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Please refer to my earlier post which is herein under.
As rightly said by Mr. Premkumar, if the basic salary of the employee for 17 days earning is less than or equal to Rs. 6500/-, then the employer's PF contribution will be on actual. But if the basic salary of the employee for 17 days earning is more than Rs. 6500/-, then the employer's PF contribution will be restricted up to Rs. 6500/- basic pay because of the cap.
This states that if the basic for 17 days is, say, Rs. 6000/-, then the PF contribution will be on Rs. 6000/- and not on a pro-rata basis. If the basic is above Rs. 6500/-, then the PF contribution will be on the cap of Rs. 6500/-. I hope you understand now.
From India, Ahmadabad
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As rightly said by Mr. Premkumar, if the basic salary of the employee for 17 days earning is less than or equal to Rs. 6500/-, then the employer's PF contribution will be on actual. But if the basic salary of the employee for 17 days earning is more than Rs. 6500/-, then the employer's PF contribution will be restricted up to Rs. 6500/- basic pay because of the cap.
This states that if the basic for 17 days is, say, Rs. 6000/-, then the PF contribution will be on Rs. 6000/- and not on a pro-rata basis. If the basic is above Rs. 6500/-, then the PF contribution will be on the cap of Rs. 6500/-. I hope you understand now.
From India, Ahmadabad
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