In the era of cost control from HR this is one option thats being followed "Legally" by some companies; This is not wrong; this will help the employee to take home more cash in the form of salary; otherwise show this in ctc and f this given as an option individuals do not prefer to loose cash hence they will okay this; thanks nag rao
From India, Hyderabad
From India, Hyderabad
Hi,
Their is 2 scenario;
1st scenario
= Limited PF Contribution
- If basic salary is more than 6500 then 12% of 6500
- If basic salary is less than 6500 then, whatever the basic salary that X 12 %
2nd scenario
= Unlimited PF Contribution
- Whatever the Basic Salary x 12%
Example;
Limited PF Contribution
Basic
10000 > (6500 x 12%) = 780
6000 < (6000 x 12%) = 720
Unlimited PF Contribution
Basic
10000 x 12% = 1200
6000 x 12% = 720
Example;
{Basic Salary 10500}
Calculation;
Limited PF Contribution
Gross Salary 35,000
- PT 200
- PF (6500x12%) 780
-------
Net Pay 34,020
Unlimited PF Contribution
Gross Salary 35,000
- PT 200
- PF (10500x12%) 1260
-----------
33540
From India, Bangalore
1Their is 2 scenario;
1st scenario
= Limited PF Contribution
- If basic salary is more than 6500 then 12% of 6500
- If basic salary is less than 6500 then, whatever the basic salary that X 12 %
2nd scenario
= Unlimited PF Contribution
- Whatever the Basic Salary x 12%
Example;
Limited PF Contribution
Basic
10000 > (6500 x 12%) = 780
6000 < (6000 x 12%) = 720
Unlimited PF Contribution
Basic
10000 x 12% = 1200
6000 x 12% = 720
Example;
{Basic Salary 10500}
Calculation;
Limited PF Contribution
Gross Salary 35,000
- PT 200
- PF (6500x12%) 780
-------
Net Pay 34,020
Unlimited PF Contribution
Gross Salary 35,000
- PT 200
- PF (10500x12%) 1260
-----------
33540
From India, Bangalore
Employer may decide to pay contribution on above the ceiling limit of Rs.6500/-
But as per my knowlege this extra amount incurred by the employer will not be taken as expenses for income tax purpose. Is this right ?
Regards
Mohandas
From India, Madras
But as per my knowlege this extra amount incurred by the employer will not be taken as expenses for income tax purpose. Is this right ?
Regards
Mohandas
From India, Madras
Dear Folks,
PF Ceiling is limited to minimum of 6500 as per the PF rules max depends on the employers.
But some companies limit the ceiling of both employers as well as employees to 6500. Some companies limit Employees share for the entire basic & employers share for 6500. Some companies bare both employees as well as employers share for the full amount of the basic.
Various employers are having their own practice.
Cheerz
Jeeva
From India, Bangalore
PF Ceiling is limited to minimum of 6500 as per the PF rules max depends on the employers.
But some companies limit the ceiling of both employers as well as employees to 6500. Some companies limit Employees share for the entire basic & employers share for 6500. Some companies bare both employees as well as employers share for the full amount of the basic.
Various employers are having their own practice.
Cheerz
Jeeva
From India, Bangalore
Dear Raj Kumar,
Most progressive and "employee care" oriented Companies follow the practice that your organization is following. It is healthy practice and you should continue with this very good HR initiative.
Cheers!!!!
Vasant Nair
From India, Mumbai
Most progressive and "employee care" oriented Companies follow the practice that your organization is following. It is healthy practice and you should continue with this very good HR initiative.
Cheers!!!!
Vasant Nair
From India, Mumbai
As per law, employer is not statutorily bound to enrol an employee as memebr of EPF Scheme 1952 if his starting salary is more thenRs 6500/-. Such employees are referred to as excluded employees. However, if such an employee is enrolled as member, then it is up to the employer to restrict their share to 12% of Rs 6500/-. The employer can not be made to contribute on any higher wages. However, many employers out of their own sweet will do indeed contribute their share on actual wages irrespective of limit.
From India, Jalandhar
From India, Jalandhar
Contribution – Minimum contribution towards PF should be 12% of the Pay.
'Pay' includes basic wages with dearness allowance, retaining allowance, (if any) and cash value of food concessions admissible thereon.
Minimum PF Contribution - 12% of the Pay
Maximum PF Contribution - 100% of the Pay
Voluntary Contribution - Member shall be at liberty to make voluntary contribution. It purely depends on the employee’s discretion.
Employer’s Contribution - Equal to 12% of the Pay of employee.
Pension Fund (EPS) - 8.33% of Pensionable Salary
Pensionable Salary = Rs. 6500/- or Pay (whichever is less).
Provident Fund -12% of the Pay – 8.33 (EPS)
In the 12% contribution from Employer, 8.33% contribution is kept in Pension fund and the rest is kept in Provident fund, where as employee’s 12% contribution is for only provident fund.
Note: As per the PF Dept employee(s) are under PF coverage but after the Basic Pay is >6500 PF cut off, they can opt for PF or not its depends on the employee(s).and also employer can restrict their contribution to PF Cut off amount.
From India, Bangalore
'Pay' includes basic wages with dearness allowance, retaining allowance, (if any) and cash value of food concessions admissible thereon.
Minimum PF Contribution - 12% of the Pay
Maximum PF Contribution - 100% of the Pay
Voluntary Contribution - Member shall be at liberty to make voluntary contribution. It purely depends on the employee’s discretion.
Employer’s Contribution - Equal to 12% of the Pay of employee.
Pension Fund (EPS) - 8.33% of Pensionable Salary
Pensionable Salary = Rs. 6500/- or Pay (whichever is less).
Provident Fund -12% of the Pay – 8.33 (EPS)
In the 12% contribution from Employer, 8.33% contribution is kept in Pension fund and the rest is kept in Provident fund, where as employee’s 12% contribution is for only provident fund.
Note: As per the PF Dept employee(s) are under PF coverage but after the Basic Pay is >6500 PF cut off, they can opt for PF or not its depends on the employee(s).and also employer can restrict their contribution to PF Cut off amount.
From India, Bangalore
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