Hi everyone,
In our organization, we haven't followed the Rs 1800 PF deduction slab but have gone with 12% on Basic for both employer and employee contributions. We have many who come back asking for their PF to be limited to Rs 1800. We would like to make an org-wide change to implement the policy. Is there any process to be followed to switch to this? Also, if people want to continue contributing more, is there a different process?
Thanks in advance.
Shwetha
From India, Bangalore
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4In our organization, we haven't followed the Rs 1800 PF deduction slab but have gone with 12% on Basic for both employer and employee contributions. We have many who come back asking for their PF to be limited to Rs 1800. We would like to make an org-wide change to implement the policy. Is there any process to be followed to switch to this? Also, if people want to continue contributing more, is there a different process?
Thanks in advance.
Shwetha
From India, Bangalore
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It is always better to contribute on the higher side to PF contributions, both by the employer and the employee. Try to convince the employees by stating that higher contributions on the upper side lead to forced savings, and the interest on PF accumulation is tax-free as per the rules. The overall effect is a gain for the employee. It is better to continue the existing system of higher PF contributions by both the employer and the employee.
Regards, S K Bandyopadhyay (WB, Howrah) CEO - USD HR Solutions [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons] www.usdhrs.in
From India, New Delhi
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Regards, S K Bandyopadhyay (WB, Howrah) CEO - USD HR Solutions [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons] www.usdhrs.in
From India, New Delhi
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Hi Shwetha.Spring, make it clear to the employees that this is a type of benefit provided by the employer because the employer can limit the ceiling to 1800. However, if they contribute 12% to the actual basic, it is a benefit just for the employees. You can also show them some calculations to persuade them further. Assume the basic salary of a certain employee is 30,000. If the cap is set at 1800, they could have 43,200 + interest added to their PF + pension, but if they pay 12% of the actual basic, they could save 86,400 + interest in their PF annually.
Regards,
Gowtham
[Phone Number Removed For Privacy-Reasons]
From India, Madurai
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Regards,
Gowtham
[Phone Number Removed For Privacy-Reasons]
From India, Madurai
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Employee reference policy.doc