Dear All pls can anybody help me out and tell me if PF will be deducted on the Notice pay being given on relieving an employee. regards Neelam
From India, Chandigarh
1From India, Chandigarh
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Notice pay depends on your pay structure. Normally, notice pay is only based on the basic salary. If one or two months of basic pay is given as notice pay, it will attract PF deductions, but ultimately, it is still your money.
Shiva Kumar H
From India, Davangere
Shiva Kumar H
From India, Davangere
Dear Mr. Shiva,
We are paying 1 month basic + project allowance to employees being retrenched. Therefore, we'll be paying them:
- Notice pay (1 Month Basic + Project Allowance)
- 15 days per year retrenchment benefit
PF will be deducted on the basic amount. Is that correct?
From India, Chandigarh
We are paying 1 month basic + project allowance to employees being retrenched. Therefore, we'll be paying them:
- Notice pay (1 Month Basic + Project Allowance)
- 15 days per year retrenchment benefit
PF will be deducted on the basic amount. Is that correct?
From India, Chandigarh
If you are paying for the notice pay, you will deduct PF on that. If you are not paying notice pay, then you are not paying him anything hence no PF can be deducted. Regards, Nilendra
Dear Nilendra Greetings. If we are ready to pay Notice pay, then whether it is for one month basic salary + DA, or one month gross salary Please clarify the amount Cheers Trisha HR Professional
From India, New Delhi
From India, New Delhi
Dear Trisha,
One month notice pay means one month salary. You will have to see if one month salary in lieu of notice pay has been defined or not in the appointment letter. If it is not defined, then one month salary in all parlance means the total gross salary for the month because salary means Basic + All Allowances.
Regards,
Nilendra
One month notice pay means one month salary. You will have to see if one month salary in lieu of notice pay has been defined or not in the appointment letter. If it is not defined, then one month salary in all parlance means the total gross salary for the month because salary means Basic + All Allowances.
Regards,
Nilendra
You are absoutely correct, pf has to be recovered only on basic and DA if terms of employement expressed, otherwise only on basic, i feel whatever your are doing id correct Shiva Kumar H
From India, Davangere
From India, Davangere
Dear all, Here I have one doubt. If pf will be deducted on notice pay then, what is the terms against noticepay paid by the employees? with regards, R Shanti
From India, Mumbai
From India, Mumbai
Dear Shanti,
Greetings.
If the notice pay is paid by the employee, it cannot be regarded as salary but as an amount returned as an advance; hence, PF cannot be recovered on this amount.
Cheers,
Trisha
HR Professional
From India, New Delhi
Greetings.
If the notice pay is paid by the employee, it cannot be regarded as salary but as an amount returned as an advance; hence, PF cannot be recovered on this amount.
Cheers,
Trisha
HR Professional
From India, New Delhi
Dear All,
I have a few clarifications regarding this matter:
If the employee serves the notice period, then he will receive his normal salary for the month, and hence, PF will be deducted in the normal course of business. If the employee does not serve the notice period:
If he leaves on the 17th and the notice period is for one month, then he will forfeit the salary for that month. That is, his attendance for that month will be treated as zero. For the remaining number of days (13 days) during the full and final settlement, the salary for 13 days will be adjusted. This means that if he is supposed to receive a certain amount from the company in the form of OSF recovery, leave encashment, etc., this amount for 13 days will be adjusted. If he has to pay the company a certain amount in the form of a loan taken or any other dues, then this amount for 13 days will be added to it and will be included in the full and final settlement amount. Hence, PF will not be recovered in this case.
Regards,
Nilendra
I have a few clarifications regarding this matter:
If the employee serves the notice period, then he will receive his normal salary for the month, and hence, PF will be deducted in the normal course of business. If the employee does not serve the notice period:
If he leaves on the 17th and the notice period is for one month, then he will forfeit the salary for that month. That is, his attendance for that month will be treated as zero. For the remaining number of days (13 days) during the full and final settlement, the salary for 13 days will be adjusted. This means that if he is supposed to receive a certain amount from the company in the form of OSF recovery, leave encashment, etc., this amount for 13 days will be adjusted. If he has to pay the company a certain amount in the form of a loan taken or any other dues, then this amount for 13 days will be added to it and will be included in the full and final settlement amount. Hence, PF will not be recovered in this case.
Regards,
Nilendra
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Notice of Employee Change.doc