Can anyone of you explain me why we calculate PF contribution on 15000/- only though the salary of the employee is 21000/-. Why we are not calculating it on 21000/-.
From India, Jalalpur
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From India, Jalalpur
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Provident Fund Contribution Ceiling
As per Provident Fund rules, there is a ceiling on the monthly salary, which is Rs 15,000. Any employee whose salary at the time of joining is more than Rs 15,000 is not expected to be a member of EPF. However, it is not mandatory that they should be excluded. Similarly, employers are under an obligation to contribute 12% of the salary. But since there is a salary ceiling of Rs 15,000, they are not legally liable to contribute 12% on the actual salary, i.e., salary above Rs 15,000. Their liability is limited to 12% of Rs 15,000 only. That is why your employer is restricting their share of contribution to 12% of Rs 15,000 even though you receive Rs 21,000 as salary.
From India, Kannur
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4526As per Provident Fund rules, there is a ceiling on the monthly salary, which is Rs 15,000. Any employee whose salary at the time of joining is more than Rs 15,000 is not expected to be a member of EPF. However, it is not mandatory that they should be excluded. Similarly, employers are under an obligation to contribute 12% of the salary. But since there is a salary ceiling of Rs 15,000, they are not legally liable to contribute 12% on the actual salary, i.e., salary above Rs 15,000. Their liability is limited to 12% of Rs 15,000 only. That is why your employer is restricting their share of contribution to 12% of Rs 15,000 even though you receive Rs 21,000 as salary.
From India, Kannur
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