Employee’s Gross salary is 17970 - what will be the PF contribution for both employee and employee?
From India, Lucknow
From India, Lucknow
There are different views in this case. First, if this is the first employment of the employee or if the employee had no PF account with his previous employment, then you can exclude him from the coverage of PF treating him as an employee with a salary of more than Rs 15000. If this decision is taken, you should collect form 11 evidencing that he was not a member of EPF earlier.
Suppose that the employer thinks that all employees should be covered by EPF irrespective of their eligibility, then you can cover him under EPF and not under Pension Fund. Since he is a new employee having no previous or existing member Id, then legally he is not eligible for pension and hence the entire contribution payable by the employer should be made in EPF rather than bifurcating it as 8.33% to Pension Fund and the remaining 3.67% to EPF.
Now, if he is an existing member, then he should be covered invariably. The contribution shall be decided as follows:
1. The employee can contribute either 12% of actual salary, ie, Rs 17970 or 12% of Rs 15000.
2. The employer can contribute either equal amount, ie, 12% (8.33% + 3.67%) of actual salary, ie, Rs 17970 or 12% of Rs 15000. This is a policy decision to be taken by the employer. If the employer is ready to contribute on actual salary, then he should contribute 12% of 17970, ie, Rs 2157 in total of which the contribution to Pension fund should be 8.33% of Rs 15000 or Rs 1250 and the balance Rs 907 should be contributed to his PF account.
From India, Kannur
4249Suppose that the employer thinks that all employees should be covered by EPF irrespective of their eligibility, then you can cover him under EPF and not under Pension Fund. Since he is a new employee having no previous or existing member Id, then legally he is not eligible for pension and hence the entire contribution payable by the employer should be made in EPF rather than bifurcating it as 8.33% to Pension Fund and the remaining 3.67% to EPF.
Now, if he is an existing member, then he should be covered invariably. The contribution shall be decided as follows:
1. The employee can contribute either 12% of actual salary, ie, Rs 17970 or 12% of Rs 15000.
2. The employer can contribute either equal amount, ie, 12% (8.33% + 3.67%) of actual salary, ie, Rs 17970 or 12% of Rs 15000. This is a policy decision to be taken by the employer. If the employer is ready to contribute on actual salary, then he should contribute 12% of 17970, ie, Rs 2157 in total of which the contribution to Pension fund should be 8.33% of Rs 15000 or Rs 1250 and the balance Rs 907 should be contributed to his PF account.
From India, Kannur
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Gross Salary(1).xls