Dear HR professionals,
I am a fresh MBA graduate joined an MNC recently. This is regarding PF calculation; I read that the PF is calculated on Basic as defined;
{(b) "basic wages" means all emoluments which are earned by an employee while on duty or 6*[ on leave or on holidays with wages in either case] in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include--
(i) the cash value of any food concession;
(ii) any dearness allowance (that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living), house-rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment;}
In my company the pf is calculated 12% on Basic+DA and my seniors support this.
Kindly enlighten me what is the correct method.
Spear
From India, Hyderabad
1I am a fresh MBA graduate joined an MNC recently. This is regarding PF calculation; I read that the PF is calculated on Basic as defined;
{(b) "basic wages" means all emoluments which are earned by an employee while on duty or 6*[ on leave or on holidays with wages in either case] in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include--
(i) the cash value of any food concession;
(ii) any dearness allowance (that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living), house-rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment;}
In my company the pf is calculated 12% on Basic+DA and my seniors support this.
Kindly enlighten me what is the correct method.
Spear
From India, Hyderabad
Hi Spear
If your company is calculating PF 12% on BasicWages + DA then they are doing correct calculation. Kindly specify your point of objection.
Thanks & regard
Sayed Iqbal
<link outdated-removed>
Email:
From India, Mumbai
If your company is calculating PF 12% on BasicWages + DA then they are doing correct calculation. Kindly specify your point of objection.
Thanks & regard
Sayed Iqbal
<link outdated-removed>
Email:
From India, Mumbai
Hi Spear
Kindly refer Section 6 under the Employees' Provident Fund & MP Act, 1952 which says "The Contribution which shall be paid by the employer to the Fund shall be [twelve percent] of the basic wages, [dearness allowance and retaining allowance (if any)] for the time being payable to each o the employees [(Whether employed by him directly or by or through a contractor)], and the employee's contributions shall be equal to the contribution payable by the employer in respect of him and may, [if any employee so desires, be an amount exceeding [twelve per cent] of his basic wages, dearness allowance and retaining allowance (if any), subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this section]"
For further clarification kindly visit Excel Consultancy Services
From India, Mumbai
Kindly refer Section 6 under the Employees' Provident Fund & MP Act, 1952 which says "The Contribution which shall be paid by the employer to the Fund shall be [twelve percent] of the basic wages, [dearness allowance and retaining allowance (if any)] for the time being payable to each o the employees [(Whether employed by him directly or by or through a contractor)], and the employee's contributions shall be equal to the contribution payable by the employer in respect of him and may, [if any employee so desires, be an amount exceeding [twelve per cent] of his basic wages, dearness allowance and retaining allowance (if any), subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this section]"
For further clarification kindly visit Excel Consultancy Services
From India, Mumbai
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