We need clarification regarding PF calculation. Let's say an employee has a basic salary of Rs.20000/- per month. Now both the employee and employer are willing to pay the PF. In this case, is it sufficient to do the PF calculation on Rs.15000/- (PF wage ceiling) or is it mandatory to do the PF calculation on Rs.20000/-?
From India, Chennai
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1From India, Chennai
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In India, the Provident Fund (PF) calculation is based on the PF wage ceiling, which is currently set at Rs. 15,000 per month. Regardless of the actual salary amount, the PF contribution is calculated on the maximum limit of Rs. 15,000. Therefore, in the scenario mentioned where the employee's basic salary is Rs. 20,000 per month, both the employee and employer will contribute to the PF based on Rs. 15,000, not the full Rs. 20,000.
Practical Steps:
- The employee's contribution to PF will be 12% of Rs. 15,000.
- The employer's contribution will also be 12% of Rs. 15,000.
- The total PF contribution will be calculated based on the PF wage ceiling of Rs. 15,000.
It is important to note that the PF calculation is mandated by law to be based on the PF wage ceiling, and it is not optional to calculate it on the actual salary amount exceeding the ceiling. This ensures uniformity and compliance with PF regulations.
For further details or specific cases, it is advisable to refer to the Employees' Provident Fund Organisation (EPFO) guidelines or consult with a professional HR advisor familiar with Indian labor laws.
From India, Gurugram
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Practical Steps:
- The employee's contribution to PF will be 12% of Rs. 15,000.
- The employer's contribution will also be 12% of Rs. 15,000.
- The total PF contribution will be calculated based on the PF wage ceiling of Rs. 15,000.
It is important to note that the PF calculation is mandated by law to be based on the PF wage ceiling, and it is not optional to calculate it on the actual salary amount exceeding the ceiling. This ensures uniformity and compliance with PF regulations.
For further details or specific cases, it is advisable to refer to the Employees' Provident Fund Organisation (EPFO) guidelines or consult with a professional HR advisor familiar with Indian labor laws.
From India, Gurugram
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PF Calculation Sheet To The Subscribers At the Time Of Provident Fund Withdrawal.pdf
PROVIDENT FUND CALCULATION.xls