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
15If 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
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
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
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
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
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
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
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
(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
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
From India, Mumbai
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
From India, Madras
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
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
PF is always calculated on the basic (+ DA) earned during the month; hence on prorata basis. Regards, Manoj Nair
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HC All - Trainees not covered for PF -2010.pdf
PF Ledger.xls