bhuwansbisht
15

Hello Seniors,
If an employee get basic salary more than Rs. 6500.00 for ex. Rs. 10000.00 and he is also a PF member & the company deduct his PF amount only upon Rs. 6500.00 i.e Rs. 780.00 (12%).
Now the question is,
If the employee is present only 20 days & he earn Rs. 6667 ( 10000 /30 * 20) as a basic in a month so the PF should still deduct upon Rs. 6500.00 or pro-rata basis i.e. Rs. 4333.00 ( 6500 / 30 x 20) ?

From India, Kashipur
r.palaniswamy
2

Dear Bhuvan,
In your example, you said Rs.10000/- as salary, what will be the break up, (Normally the salary will have Basic, DA, HRA, COnveyance, etc., ). The PF will attract only Basic and DA only (that to it has to cover minimum 60% of the salary).
You can give the actual rate of salary with break up details.
Or if you pay consolidated 10,000/- you have to pay upto Rs.6500/- per month.
Regards
R.Palaniswamy

From India, Coimbatore
ameevaishnav
1

Dear Bhuvan,
The PF amount will be calculated on Prorata basis.
If a person has worked only for 10 days in a month, why will he/she will pay full amount of PF ???
Some times it may happen that the total amount of PF is almost near to the salary of 10 days. In that case the take home will be hardly any amount.
So it has to be on prorata basis like PT an ESIC.
Regrds,
Amee.

From India, Mumbai
vijenderragidi
10

Hi Bhuvan,
It is a very valid confusion.
Pls refer to the Cl.29 (3) of the Employee's PF Scheme, 1952, which reads as follows ;
" the contribution shall be calculated on the basis of the basic wages, dearness allowance (including the cash value of any food concession) and retaining allowance (if any) actually drawn during the whole month whether paid on daily, weekly, fortnightly or monthly basis"
It means, to simplify, the PF contribution is calculated on the basic ++ earnings (actually earned during the month), whatever the case may be, subject to a maximum of Rs.780/-.
Hope this helps !!
All the best,
Vijender Ragidi.

From India, Secunderabad
satvikmind
The Contribution for particular month is subject to,
(Basic Pay+DA+cash value of food concession+Retaining allowance) earned during that month. 6500 however is the ceiling but with a joint request from the member and the employer, It can be charged on any amount higher than 6500 Rs.
IMPORTANT FACTOR FROM EMPLOYER'S VISION HERE SHOULD BE,
'EMPLOYER'S CONTRIBUTION FOR THE MONTH, THINK, WHAT IF WHEN THERE ARE 100 EMPLOYEES of that sort, So Pro-rata is adopted by Many.'
Also Employees will be happy with pro-rata due to a simple factor that is 'securing a healthy monthly spending in a month where they have already lost enough for Absentism.'

Deduct on Pro-rata as you calculated i.e 4333, OR
Go for the ceiling 6500 OR
Go for the actual 6667 Rs, ALL are permissible.
Regards,
Swapnil


Vasant Nair
90

It will be on pro-rata basis based on the No. of days the employ is paid his salary for. Vasant Nair HR Advisor
From India, Mumbai
a.ravi.online
Hi, PF will be deducted on the base of Basic+DA. In your case, the amount will be deducted on prorata basis. Ravi
From India, Madras
samsudeen.m.s.
Hi,
What I think is Mr.Vijender Ragidi says is correct because, in PF terms - the "basic wages" means all emouluments which are earned by an employee while on duty or (on leave or on holidays with wages in either case) in accordance with the terms of the conract of employment and which are paid or payable in cash to him.
regards,
Samsudeen.M.S.

From India, Pondicherry
Manoj G. Nair
PF is always calculated on the basic (+ DA) earned during the month; hence on prorata basis. Regards, Manoj Nair

mitra2009
2

IT will be deducted on pro rata basis. the actual basic received by the employee. best regards, Mahendra
From India, Jamnagar
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