Dear Sir/Madam,
My question is related to PF contributions. If an employee's basic pay is:
Basic pay - 34,000
Then PF contributions to the employee's side is 12% = 4,080
And employer contribution is divided into two parts: EPF 8.33% and PF 3.67%.
Total employer-side contribution = 12%. These two parts of employer-side contributions, I cannot understand. Please explain to me in detail where employer contribution money is deducted.
Thanks,
Anjna
From India, Chandigarh
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8My question is related to PF contributions. If an employee's basic pay is:
Basic pay - 34,000
Then PF contributions to the employee's side is 12% = 4,080
And employer contribution is divided into two parts: EPF 8.33% and PF 3.67%.
Total employer-side contribution = 12%. These two parts of employer-side contributions, I cannot understand. Please explain to me in detail where employer contribution money is deducted.
Thanks,
Anjna
From India, Chandigarh
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Understanding PF Contributions
PF contribution made by employees is 12% of the basic salary; the entire amount goes to the employees' PF account. On the other hand, the PF contribution made by the employer is also 12%, where 8.33% is allocated to the Employee Pension Fund, and the remaining 3.67% goes to the PF account. Therefore, both the employee and the employer contribute 12% each.
I hope this explanation clarifies the contribution details for you.
Thank you,
Vikram
From India, Pune
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PF contribution made by employees is 12% of the basic salary; the entire amount goes to the employees' PF account. On the other hand, the PF contribution made by the employer is also 12%, where 8.33% is allocated to the Employee Pension Fund, and the remaining 3.67% goes to the PF account. Therefore, both the employee and the employer contribute 12% each.
I hope this explanation clarifies the contribution details for you.
Thank you,
Vikram
From India, Pune
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[QUOTE=vikkybhati07;1513584]
PF Contribution Made by Employees:
12% of basic, the entire amount goes to the employees' PF account.
PF Contribution Made by Employer:
12% i.e., 8.33% goes to the Employee Pension Fund and the remaining 3.67% goes to the PF account.
So, the employee and employer contribute 12% each. Hope you understand.
It should be noted that 8.33% towards EPS is subject to the ceiling of only Rs. 540/-. For employees whose basic + DA is more than 6500, the contribution made by the employer directly goes to the employees' PF account other than the mandatory Rs. 540/- to EPS.
Regards,
Vikram
From India, Lucknow
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PF Contribution Made by Employees:
12% of basic, the entire amount goes to the employees' PF account.
PF Contribution Made by Employer:
12% i.e., 8.33% goes to the Employee Pension Fund and the remaining 3.67% goes to the PF account.
So, the employee and employer contribute 12% each. Hope you understand.
It should be noted that 8.33% towards EPS is subject to the ceiling of only Rs. 540/-. For employees whose basic + DA is more than 6500, the contribution made by the employer directly goes to the employees' PF account other than the mandatory Rs. 540/- to EPS.
Regards,
Vikram
From India, Lucknow
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Dear Anjna,
ESI is a contribution made for employee sickness, accidents, maternity, etc. The employer's contribution is 4.75% of the Gross Salary, and the employee's contribution is 1.75% of the Gross Salary. For a company or organization to be eligible for ESI, the employee strength must be at least 20. The ceiling is 15000/-, which means if any employee is drawing more than 15k, then it is not mandatory for that particular employee to be part of ESI.
Hope you understood!!!!
Regards,
Vikram
From India, Pune
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ESI is a contribution made for employee sickness, accidents, maternity, etc. The employer's contribution is 4.75% of the Gross Salary, and the employee's contribution is 1.75% of the Gross Salary. For a company or organization to be eligible for ESI, the employee strength must be at least 20. The ceiling is 15000/-, which means if any employee is drawing more than 15k, then it is not mandatory for that particular employee to be part of ESI.
Hope you understood!!!!
Regards,
Vikram
From India, Pune
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