Dear All,
Please help me to understand my PF deduction. I am working in a software company in Bangalore, which started 3 years back and has 35-40 employees.
Salary Structure
My salary structure is as follows:
- Basic: 6000/-
- DA: 1500/-
- House rent: 2813/-
- Conveyance: 750/-
- Communication: 750/-
- Medical reimbursement: 1250/-
- LTA: 750/-
- Company's contribution to PF: 780/-
- Special allowances: 407/-
Totaling 15000/-
They informed me that the in-hand salary would be 13000/-. I joined the company in June 2014, and since then, the monthly PF deduction has been 780+780/-. Additionally, there were deductions for professional tax and medical insurance premium totaling 2000/-, bringing my net pay to 13000/-.
Changes in PF Deduction
In September, the PF deduction increased to 1800+1800/ due to a change in the PF slab. There was also a 432/- deduction for medical insurance premium and professional tax. They made changes to my salary structure by removing special allowances, and LTA decreased to 137/- from September. Consequently, my current in-hand salary is 11000/-, which is lower than what was initially communicated to me. When I inquired about this discrepancy, they mentioned that the difference would be my money and that I would receive it.
However, I believe that I am receiving 2000/- less, and the value of money fluctuates. While the deducted amount is my PF contribution, it is not accessible to me immediately.
I would appreciate your valuable insights.
Thanks,
Sabaq
From India, Bangalore
Acknowledge(0)
Amend(0)
Please help me to understand my PF deduction. I am working in a software company in Bangalore, which started 3 years back and has 35-40 employees.
Salary Structure
My salary structure is as follows:
- Basic: 6000/-
- DA: 1500/-
- House rent: 2813/-
- Conveyance: 750/-
- Communication: 750/-
- Medical reimbursement: 1250/-
- LTA: 750/-
- Company's contribution to PF: 780/-
- Special allowances: 407/-
Totaling 15000/-
They informed me that the in-hand salary would be 13000/-. I joined the company in June 2014, and since then, the monthly PF deduction has been 780+780/-. Additionally, there were deductions for professional tax and medical insurance premium totaling 2000/-, bringing my net pay to 13000/-.
Changes in PF Deduction
In September, the PF deduction increased to 1800+1800/ due to a change in the PF slab. There was also a 432/- deduction for medical insurance premium and professional tax. They made changes to my salary structure by removing special allowances, and LTA decreased to 137/- from September. Consequently, my current in-hand salary is 11000/-, which is lower than what was initially communicated to me. When I inquired about this discrepancy, they mentioned that the difference would be my money and that I would receive it.
However, I believe that I am receiving 2000/- less, and the value of money fluctuates. While the deducted amount is my PF contribution, it is not accessible to me immediately.
I would appreciate your valuable insights.
Thanks,
Sabaq
From India, Bangalore
Acknowledge(0)Amend(0)
1. If your salary for the purpose of PF calculation is Rs 15,000 per month, what your company has done is quite correct. They have simply restructured your pay by reducing your LTA and Special Allowance. This is to ensure that the increased Employer PF contribution (from Rs 780 to Rs 1800) comes from your salary.
2. I have a small issue with regard to the PF calculation. In the salary, your company will probably have to exclude both HRA and Employer PF while calculating PF. In your case, your PF should be calculated as 12% of Rs 10,387 and not as 12% of Rs 15,000. You can check with them in this regard.
From India, Madras
Acknowledge(0)Amend(0)
82. I have a small issue with regard to the PF calculation. In the salary, your company will probably have to exclude both HRA and Employer PF while calculating PF. In your case, your PF should be calculated as 12% of Rs 10,387 and not as 12% of Rs 15,000. You can check with them in this regard.
From India, Madras
Acknowledge(0)Amend(0)
Understanding PF Qualifying Salary
Your PF qualifying salary should be Rs. 9000 even at the PFO's demanding side; otherwise, it should be Rs. 7500, i.e., basic + DA alone. Therefore, on the higher side, the PF deduction can be Rs. 1080 and not more than that. The other components of your salary, such as HRA (which is exempted from PF), reimbursements, and employer's contributions, will not be taken as salary for the purpose of PF contribution.
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Your PF qualifying salary should be Rs. 9000 even at the PFO's demanding side; otherwise, it should be Rs. 7500, i.e., basic + DA alone. Therefore, on the higher side, the PF deduction can be Rs. 1080 and not more than that. The other components of your salary, such as HRA (which is exempted from PF), reimbursements, and employer's contributions, will not be taken as salary for the purpose of PF contribution.
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)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.