We pay the overtime salary in cash and maintain records separately. The question is, one of our employees wants to take a loan from the bank, and his monthly earnings in the bank are 23,400 rs + overtime is nearly about 10,000 rs. He demanded to show his OT in the bank for loan purposes.
What if I mention his OT in the bank? Is PF applicable on OT?
Note: The bank will not accept the overtime salary letter for loan purposes.
From India, Ahmedabad
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What if I mention his OT in the bank? Is PF applicable on OT?
Note: The bank will not accept the overtime salary letter for loan purposes.
From India, Ahmedabad
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Hi,
PF is not applicable for OT payment.
OT is a variable pay (which means it differs from month to month), and hence the bank will not consider it for the purpose of loan eligibility.
You may issue a certification letter to the employee mentioning his date of joining, fixed salary details, and also state that the employee is eligible for OT payment, which is a variable component.
From India, Madras
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1015PF is not applicable for OT payment.
OT is a variable pay (which means it differs from month to month), and hence the bank will not consider it for the purpose of loan eligibility.
You may issue a certification letter to the employee mentioning his date of joining, fixed salary details, and also state that the employee is eligible for OT payment, which is a variable component.
From India, Madras
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