Dear Friends
I give below a typical case where in I do not know, how to calculate PF Admn
charges. I would like to know as per PF Act what is the correct calculation.
i.e. whether pf admn charges should be calculated on the ceiling wages of
Rs.6500/- of on the total wages, since the employee is contributing more than the ceiling limit.
Please let me have the clarity, as I am an new to HR Dept.
Case
If B + DA > 6500, then Employee = 12%, Employer = 12%+1.61%
Example : B + DA = 10000 and considering that the employee is not contributing any additional PF greater than 12 % of 6500 for 10 months of the year and in February & March employee had contributed a lump sum of Rs. 3000 in each month then
Employer = Rs 780, Employee = Rs 3780 (( 12% * 6500) + 3000) + 1.61% * 6500 = Rs. 104.65
In this case whether the admin charge 1.61 % on 6500 is correct or not? or 1.61% should be calculated on Rs.10000 ( B+DA)as stated in the first paragraph.
Regards
Sreenandhini
From India, Madras
Acknowledge(0)
Amend(0)
1I give below a typical case where in I do not know, how to calculate PF Admn
charges. I would like to know as per PF Act what is the correct calculation.
i.e. whether pf admn charges should be calculated on the ceiling wages of
Rs.6500/- of on the total wages, since the employee is contributing more than the ceiling limit.
Please let me have the clarity, as I am an new to HR Dept.
Case
If B + DA > 6500, then Employee = 12%, Employer = 12%+1.61%
Example : B + DA = 10000 and considering that the employee is not contributing any additional PF greater than 12 % of 6500 for 10 months of the year and in February & March employee had contributed a lump sum of Rs. 3000 in each month then
Employer = Rs 780, Employee = Rs 3780 (( 12% * 6500) + 3000) + 1.61% * 6500 = Rs. 104.65
In this case whether the admin charge 1.61 % on 6500 is correct or not? or 1.61% should be calculated on Rs.10000 ( B+DA)as stated in the first paragraph.
Regards
Sreenandhini
From India, Madras
Acknowledge(0)Amend(0)
I have already answered your queries including the above vide citeHR/320892 as under. Kindly go through.
Dear Sreenandhini,
Example : The employee’s Basic - 5000 , DA – 4000 , Total of Basic + DA = 9000
The Employee is on Loss of Pay for 5 days in the month and his earned salary is
(9000 / 30) * 25 = 7500. For the purpose of PF calculation, Rs. 7500 will be considered.
The above calculation is fully correct.
Case 2:
If B + DA < 6500, then Employee = 12%, Employer = 12%+1.61%
Example : B + DA = 5000
Employee = Rs 600, Employer = Rs 600 + 1.61% * 5000 = Rs. 80.50
The above calculation is fully correct.
Case 3: (a)
If B + DA > 6500, then Employee = 12%, Employer = 12%+1.61%
Example : B + DA = 10000 and considering that the employee is not contributing any additional PF greater than 12 % of 6500, then
Employee = Rs 780, Employer = Rs 780 + 1.61% * 6500 = Rs. 104.65
The above calculation is fully correct.
Case 3: (b)
If B + DA > 6500, then Employee = 12%, Employer = 12%+1.61%
Example : B + DA = 10000 and considering that the employee is contributing additional PF for total of his salary then
Employee = Rs 780, Employer = Rs 1200 ( 10000* 12%) + 1.61% * 6500 = Rs. 104.65
In this case whether the admin charge 1.61 % on 6500 is correct or not?
Here there happened mistakes.
1. If employee is not ready for higher contribution why employer has to contribute?
2. The split up of 1.61% is as follows : 1.1% is admin charge on PF amount, 0.5% is premium on EDLI and 0.1% is admin charge on EDLI. It is to be mentioned that premium & admin charges on EDLI has to restricted on ceiling salary (Rs. 6500). But admin charges on PF may vary according to the contribution above ceiling salary.
Case 3: (c)
If B + DA > 6500, then Employee = 12%, Employer = 12%+1.61%
Example : B + DA = 10000 and considering that the employee is not contributing any additional PF greater than 12 % of 6500 for 10 months of the year and in February & March employee had contributed a lump sum of Rs. 3000 in each month then
Employee = Rs 780, Employer = Rs 3780 (( 12% * 6500) + 3000) + 1.61% * 6500 = Rs. 104.65
In this case whether the admin charge 1.61 % on 6500 is correct or not?
As stated above split the normal contribution & additional contribution (mistakingly you quoted as employee 780 & employer 3780, but it is vise versa) and charge 1.1% only on 3000.
Abbas.P.S
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Sreenandhini,
Example : The employee’s Basic - 5000 , DA – 4000 , Total of Basic + DA = 9000
The Employee is on Loss of Pay for 5 days in the month and his earned salary is
(9000 / 30) * 25 = 7500. For the purpose of PF calculation, Rs. 7500 will be considered.
The above calculation is fully correct.
Case 2:
If B + DA < 6500, then Employee = 12%, Employer = 12%+1.61%
Example : B + DA = 5000
Employee = Rs 600, Employer = Rs 600 + 1.61% * 5000 = Rs. 80.50
The above calculation is fully correct.
Case 3: (a)
If B + DA > 6500, then Employee = 12%, Employer = 12%+1.61%
Example : B + DA = 10000 and considering that the employee is not contributing any additional PF greater than 12 % of 6500, then
Employee = Rs 780, Employer = Rs 780 + 1.61% * 6500 = Rs. 104.65
The above calculation is fully correct.
Case 3: (b)
If B + DA > 6500, then Employee = 12%, Employer = 12%+1.61%
Example : B + DA = 10000 and considering that the employee is contributing additional PF for total of his salary then
Employee = Rs 780, Employer = Rs 1200 ( 10000* 12%) + 1.61% * 6500 = Rs. 104.65
In this case whether the admin charge 1.61 % on 6500 is correct or not?
Here there happened mistakes.
1. If employee is not ready for higher contribution why employer has to contribute?
2. The split up of 1.61% is as follows : 1.1% is admin charge on PF amount, 0.5% is premium on EDLI and 0.1% is admin charge on EDLI. It is to be mentioned that premium & admin charges on EDLI has to restricted on ceiling salary (Rs. 6500). But admin charges on PF may vary according to the contribution above ceiling salary.
Case 3: (c)
If B + DA > 6500, then Employee = 12%, Employer = 12%+1.61%
Example : B + DA = 10000 and considering that the employee is not contributing any additional PF greater than 12 % of 6500 for 10 months of the year and in February & March employee had contributed a lump sum of Rs. 3000 in each month then
Employee = Rs 780, Employer = Rs 3780 (( 12% * 6500) + 3000) + 1.61% * 6500 = Rs. 104.65
In this case whether the admin charge 1.61 % on 6500 is correct or not?
As stated above split the normal contribution & additional contribution (mistakingly you quoted as employee 780 & employer 3780, but it is vise versa) and charge 1.1% only on 3000.
Abbas.P.S
From India, Bangalore
Acknowledge(0)Amend(0)
I understand that you have already explained. Now my doubt is
whether I should calculate 1.1% of PF Admn charges on Rs.6500/-
or Rs.10000/- ( including additional contribution of the employee)
and what the PF Act says about this.
I request you to clarify this point only and give reference of
relavant section of PF Act.
Regards
Sreenandhini.
From India, Madras
Acknowledge(0)Amend(0)
whether I should calculate 1.1% of PF Admn charges on Rs.6500/-
or Rs.10000/- ( including additional contribution of the employee)
and what the PF Act says about this.
I request you to clarify this point only and give reference of
relavant section of PF Act.
Regards
Sreenandhini.
From India, Madras
Acknowledge(0)Amend(0)
Kindly refer the concerned portion as under :
"Example : B + DA = 10000 and considering that the employee is not contributing any additional PF greater than 12 % of 6500 for 10 months of the year and in February & March employee had contributed a lump sum of Rs. 3000 in each month then
Employee = Rs 780, Employer = Rs 3780 (( 12% * 6500) + 3000) + 1.61% * 6500 = Rs. 104.65
In this case whether the admin charge 1.61 % on 6500 is correct or not?
As stated above split the normal contribution & additional contribution (mistakingly you quoted as employee 780 & employer 3780, but it is vise versa) and charge 1.1% only on 3000."
It is clear that 1.1% is not for ceiling limit, but for the actual contribution.
For details kindly refer para 38(1) of the Act.
Abbas.P.S
From India, Bangalore
Acknowledge(0)Amend(0)
"Example : B + DA = 10000 and considering that the employee is not contributing any additional PF greater than 12 % of 6500 for 10 months of the year and in February & March employee had contributed a lump sum of Rs. 3000 in each month then
Employee = Rs 780, Employer = Rs 3780 (( 12% * 6500) + 3000) + 1.61% * 6500 = Rs. 104.65
In this case whether the admin charge 1.61 % on 6500 is correct or not?
As stated above split the normal contribution & additional contribution (mistakingly you quoted as employee 780 & employer 3780, but it is vise versa) and charge 1.1% only on 3000."
It is clear that 1.1% is not for ceiling limit, but for the actual contribution.
For details kindly refer para 38(1) of the Act.
Abbas.P.S
From India, Bangalore
Acknowledge(0)Amend(0)Engage with peers to discuss and resolve work and business challenges collaboratively - share and document your knowledge. Our AI-powered platform, features real-time fact-checking, peer reviews, and an extensive historical knowledge base. - Join & Be Part Of Our Community.
Circular Dated 28-10-2016 for settlement of PF Death Case Claims within 7 days.pdf
PF Death case Composite Claim Form No 20,10D & 5IF.xls