Hi. I want to understand if PF of employees should be deducted from the Basic salary component or if it should be in addition to the Basic amount of an employee's salary. For example, is it Basic + HRA + Conveyance + Special allowance + employee's PF + employer's PF or Basic + HRA + Conveyance + Special allowance + employer's PF.
From India, Surat
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1From India, Surat
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Dear IQ India,
Provident Fund is generally deducted both from employees as well as the employer, 12% of (Basic+DA). Establishments employing 20 or more persons are required to deduct PF from the salary of employees. The salary breakup for monthly salary (10,000) is not fixed as it varies from company to company and, in general, it includes Basic, Conveyance (800), HRA (40% or 50% of Basic), Medical allowance, Special allowance, etc.
Therefore, a small example:
Consider the basic of an employee if less than 6,000 (say 6,000/-).
Employee contribution will be 12% = 720
Employer contribution will be 12% (which is again classified),
EPF (3.67%) = 220
EPS (8.33%) = 499
EPF Admin charges (1.10%) = 66
EDLI (0.50%) = 30
EDLI Admin charges (0.01%) = 1
Consider the basic of an employee if less than 10,000/-
Employee contribution will be 12% = 659
Employer contribution will be 12% (which is again classified),
EPF (3.67%) = 541
EPS (8.33%) = 541 (It is calculated on 6,500/- and the remaining amount is added to the EPF)
EPF Admin charges (1.10%) = 110
EDLI (0.50%) = 33
EDLI Admin charges (0.01%) = 1
Hope this clarifies your query.
From India, Visakhapatnam
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Provident Fund is generally deducted both from employees as well as the employer, 12% of (Basic+DA). Establishments employing 20 or more persons are required to deduct PF from the salary of employees. The salary breakup for monthly salary (10,000) is not fixed as it varies from company to company and, in general, it includes Basic, Conveyance (800), HRA (40% or 50% of Basic), Medical allowance, Special allowance, etc.
Therefore, a small example:
Consider the basic of an employee if less than 6,000 (say 6,000/-).
Employee contribution will be 12% = 720
Employer contribution will be 12% (which is again classified),
EPF (3.67%) = 220
EPS (8.33%) = 499
EPF Admin charges (1.10%) = 66
EDLI (0.50%) = 30
EDLI Admin charges (0.01%) = 1
Consider the basic of an employee if less than 10,000/-
Employee contribution will be 12% = 659
Employer contribution will be 12% (which is again classified),
EPF (3.67%) = 541
EPS (8.33%) = 541 (It is calculated on 6,500/- and the remaining amount is added to the EPF)
EPF Admin charges (1.10%) = 110
EDLI (0.50%) = 33
EDLI Admin charges (0.01%) = 1
Hope this clarifies your query.
From India, Visakhapatnam
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Hi,
The PF is deducted on the basic salary, whether it is 40% or 50% of the gross amount. You can reduce the PF contribution by adjusting the basic salary to $6500, resulting in a PF deduction of $780. This adjustment helps in saving both the employee's and employer's funds.
From India, Hyderabad
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The PF is deducted on the basic salary, whether it is 40% or 50% of the gross amount. You can reduce the PF contribution by adjusting the basic salary to $6500, resulting in a PF deduction of $780. This adjustment helps in saving both the employee's and employer's funds.
From India, Hyderabad
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