Provident Fund Calculation for Partial Month Salary
I am working in a Real Estate Organization, and I have faced a situation wherein an employee's basic salary plus dearness allowance (DA) is Rs. 17,500, exceeding Rs. 15,000 per month, and his Provident Fund (PF) is deducted at a rate of 12% of Rs. 15,000, i.e., Rs. 1,800 per month on a full working day.
However, if in a month, he is not paid for the full month, meaning if he is paid only for 10 days in that month, then whether his PF will be calculated based on Rs. 17,500 (for 10 days) or Rs. 15,000 (for 10 days). According to me, it has to be calculated on Rs. 15,000, but a few have told me to deduct it based on Rs. 17,500.
If for 31 days of the month his basic salary according to Rs. 17,500 will be Rs. 5,645 for 10 days, and the PF contribution will be Rs. 677.41, whereas according to Rs. 15,000, it will be Rs. 4,839 for 10 days, and the PF contribution will be Rs. 580.60.
Your early responses will be highly appreciated.
Regards,
Shivendra Tripathi
From India, Delhi
Acknowledge(0)
Amend(0)
I am working in a Real Estate Organization, and I have faced a situation wherein an employee's basic salary plus dearness allowance (DA) is Rs. 17,500, exceeding Rs. 15,000 per month, and his Provident Fund (PF) is deducted at a rate of 12% of Rs. 15,000, i.e., Rs. 1,800 per month on a full working day.
However, if in a month, he is not paid for the full month, meaning if he is paid only for 10 days in that month, then whether his PF will be calculated based on Rs. 17,500 (for 10 days) or Rs. 15,000 (for 10 days). According to me, it has to be calculated on Rs. 15,000, but a few have told me to deduct it based on Rs. 17,500.
If for 31 days of the month his basic salary according to Rs. 17,500 will be Rs. 5,645 for 10 days, and the PF contribution will be Rs. 677.41, whereas according to Rs. 15,000, it will be Rs. 4,839 for 10 days, and the PF contribution will be Rs. 580.60.
Your early responses will be highly appreciated.
Regards,
Shivendra Tripathi
From India, Delhi
Acknowledge(0)Amend(0)
Hi Mr. Tripathi,
Good morning!
You are required to pay a PF contribution of Rs 5645. This is because the employee's salary in full pay exceeds the ceiling of Rs 15,000. However, for a 10-day pay period, the amount falls below the threshold of Rs 15,000. Therefore, you need to deduct a PF contribution of Rs 5645, which amounts to Rs 677.4.
With Regards,
Mr. Thumbs Up
From India, Chennai
Acknowledge(1)
Amend(0)
105Good morning!
You are required to pay a PF contribution of Rs 5645. This is because the employee's salary in full pay exceeds the ceiling of Rs 15,000. However, for a 10-day pay period, the amount falls below the threshold of Rs 15,000. Therefore, you need to deduct a PF contribution of Rs 5645, which amounts to Rs 677.4.
With Regards,
Mr. Thumbs Up
From India, Chennai
Acknowledge(1)Amend(0)
Understanding NCP and Salary Deductions
If an employee is absent from work, it will be treated as an NCP (Non-Contributory Period) for that month. The term NCP itself signifies "Non-Contribution Period," so deductions cannot be made towards the overall ₹15,000 ceiling.
When requesting the ECR (Online Monthly Returns), if the employer marks you as being present for the full 30 or 31 days (to deduct from the ₹15,000 ceiling), it implies that you were present for the entire month and are entitled to receive a full salary. In such cases, you should request your full salary with this evidence and have the option to escalate the matter to the Labour Inspector if needed.
However, if your NCP days are marked in the ECR (Online Monthly Returns) and the employer has already deducted from the ₹15,000 ceiling at the beginning of the month, they should not deduct the full ₹15,000 as you have NCP days in that specific month. In such instances, it indicates that your PF has been incorrectly calculated.
Regards
From India, Hyderabad
Acknowledge(1)Amend(0)
If an employee is absent from work, it will be treated as an NCP (Non-Contributory Period) for that month. The term NCP itself signifies "Non-Contribution Period," so deductions cannot be made towards the overall ₹15,000 ceiling.
When requesting the ECR (Online Monthly Returns), if the employer marks you as being present for the full 30 or 31 days (to deduct from the ₹15,000 ceiling), it implies that you were present for the entire month and are entitled to receive a full salary. In such cases, you should request your full salary with this evidence and have the option to escalate the matter to the Labour Inspector if needed.
However, if your NCP days are marked in the ECR (Online Monthly Returns) and the employer has already deducted from the ₹15,000 ceiling at the beginning of the month, they should not deduct the full ₹15,000 as you have NCP days in that specific month. In such instances, it indicates that your PF has been incorrectly calculated.
Regards
From India, Hyderabad
Acknowledge(1)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
ATTANDANCE, SALARY SHEET & PF CALCULATIONS.xl s
Deductions From Salary-sec.80 Items-checklist .docx
Circular on PF Damage & Interest Calculations.pd f