Khafeeman, please check that though ceiling is Rs. 6500/- for the employer, the amount works out for 13.61% for employer ie Rs. 8845 and not Rs. 780/- As long as ceiling is maintained, the Employer need not pay beyond Rs. 6500/- base.
From India, Nellore
24From India, Nellore
Khafeeman, please check that though ceiling is Rs. 6500/- for the employer, the amount works out for 13.61% for employer ie Rs. 885/- pm and not Rs. 780/- As long as ceiling is maintained, the Employer need not pay beyond Rs. 6500/- base.
From India, Nellore
From India, Nellore
Dear Mr.Thakur,
Pl refer to your query on the above subject,Pl.refer Col.No.12 of the circular issued by CPFO Mr.R C Mishra who was retired from the services on 30/11/12. The circular issued particularly to the departmental purpose for taking steps/guidelines for conducting quasi Judicial enquiry under Sec 7 A for violation of rules for non compliance of provisions under EPF Act -1952. The point has been raised on splitting of Wages i.e.basic wages has been defined under sec 2(b) (II)means any commission or allowances shall be taken in to consideration as a part of wage. In this context the Honorable Supreme Court gave a verdict \'\' All such allowances or commission or other components of the salary paid to the employees having uniformity then only it will comes under part of wages for consideration.
Further as you aware that pl.refer sec 6 (B) of EPF Act -1952 rules describe PF contribution is payable on Basic Wages, DA and retaining allowance paid to the employees for contrib
From India, Chennai
Pl refer to your query on the above subject,Pl.refer Col.No.12 of the circular issued by CPFO Mr.R C Mishra who was retired from the services on 30/11/12. The circular issued particularly to the departmental purpose for taking steps/guidelines for conducting quasi Judicial enquiry under Sec 7 A for violation of rules for non compliance of provisions under EPF Act -1952. The point has been raised on splitting of Wages i.e.basic wages has been defined under sec 2(b) (II)means any commission or allowances shall be taken in to consideration as a part of wage. In this context the Honorable Supreme Court gave a verdict \'\' All such allowances or commission or other components of the salary paid to the employees having uniformity then only it will comes under part of wages for consideration.
Further as you aware that pl.refer sec 6 (B) of EPF Act -1952 rules describe PF contribution is payable on Basic Wages, DA and retaining allowance paid to the employees for contrib
From India, Chennai
Hi all,
What Mr KHAN stated is correct. Though the circular mandates for 12% contribution on gross excluding HRA, this does not cast any liability on the employer. He still continue to contribute only on the ceiling of Rs.6500/- as the scheme leaves it to the discretion of the employer regarding contribution over and above the ceiling.
Sasikumar.R.
Senior Manager Legal
From India, Coimbatore
What Mr KHAN stated is correct. Though the circular mandates for 12% contribution on gross excluding HRA, this does not cast any liability on the employer. He still continue to contribute only on the ceiling of Rs.6500/- as the scheme leaves it to the discretion of the employer regarding contribution over and above the ceiling.
Sasikumar.R.
Senior Manager Legal
From India, Coimbatore
Dear Thakur The liability of the employer for EPF contribution is in respect of employees drawing wages(Basic +admissible allowances) upto Rs. 6500/- only. N P Singh
From India, Delhi
From India, Delhi
As i think , both are right but a huge confusion is being created by EPFO only.. they are trying to cover only the Employees as the govt has not intend/ initiate the any process to amend the para 26 A of the EPF & MP Act, which is mandate the maximum limit of Basic wages for EPF purpose...
From India, Mumbai
From India, Mumbai
PF circular kept in abeyance, says Kharge
It raised a lot of queries and caused much confusion
Union Labour and Employment Minister Mallikarjun Kharge on Thursday said the November 30 circular issued by the Employees Provident Fund Organisation (EPFO) on the inclusion of certain allowances for calculating Provident Fund contribution has been kept in abeyance.
Talking to The Hindu here, he said since there were a lot of queries and confusion on the circular issued by the Chief Commissioner of Provident Fund, the government had decided to keep it in abeyance until further order. “So the status quo will continue.”
Informed sources said though the circular — on fixing the PF contribution while calculating employees’ basic wages — contained nothing new and only highlighted what was there in Section 2 of the EPF Act, there was a lot of confusion among employers.
The circular stated that all allowances, except a few, should be taken into account for calculating wages, and from that the PF contribution of employers had to be arrived at. This meant an employer had to contribute more towards PF for the employees. However, it did not clarify which of the allowances were to be taken into account for calculating basic wage.
Originally, the circular was issued to arrest the growing trend among some employers to lessen their burden on PF contribution by splitting the basic salary into various allowances and thus bringing down their contribution. This results in loss to employees.
There are over 5 crore subscribers in the EPFO and employees have to contribute a statutory minimum of 12 per cent of their basic salary towards PF and an equal amount is contributed by employers.
The circular said basic wages “encompasses all payments except the specified exclusions. All such allowances which are ordinarily, necessarily and uniformly paid to the employees are to be treated as part of the basic wages.”
PF does not cover certain “specified exclusions” like “cash value of any food concession; any dearness allowance ... 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 …”
warm regards
Jana Venkata Ramakrishna
09703100700
From India, Hyderabad
dear all
i am not much experienced but still want to be the part of this conversation .
first of all , that cieling of 6500 , is for pension amount . There is no such limit of pf , it is 12% of basic , simple as that .
And the circular you are talking about . is just a circular , there is nothing mentioned regarding implementation.
as per the circular , pf will be deducted on the gross salary .
in case , where empoyee is having salary in ctc , company will revise the salary structure and put that extra burden on employee itself .
but where employee is drawing simply a salary with no documentation , or contract (means labour/worker) employer has to bear the extra burden .
From India, Delhi
i am not much experienced but still want to be the part of this conversation .
first of all , that cieling of 6500 , is for pension amount . There is no such limit of pf , it is 12% of basic , simple as that .
And the circular you are talking about . is just a circular , there is nothing mentioned regarding implementation.
as per the circular , pf will be deducted on the gross salary .
in case , where empoyee is having salary in ctc , company will revise the salary structure and put that extra burden on employee itself .
but where employee is drawing simply a salary with no documentation , or contract (means labour/worker) employer has to bear the extra burden .
From India, Delhi
Hon. Kharge confused more, because he yielded to the pressure of the contractors and industrialists. Presently, the less made by the employer is loss to the government in the first instant and employee ultimately. By Hon. Kharge stoppage is nothing but to salute the employer at the cost of government and employees. What kind of welfare govt.it is? Very sad state of affairs.
From India, Nellore
From India, Nellore
For last six years if there is any change i am not sure, but till 2006 it was 12% of the basic salary to the maximum limit of Rs.6500. Employers contribution is also 12 % maximum to the limit of Rs.6500.
Voluntarliy employee can opt to increase the rate of contribution, same applies to company they can increase as a welfare etc etc.
Gross salary is never counted to calculate PF contribution, it is always purely the basic salary.
From Australia, Balwyn
Voluntarliy employee can opt to increase the rate of contribution, same applies to company they can increase as a welfare etc etc.
Gross salary is never counted to calculate PF contribution, it is always purely the basic salary.
From Australia, Balwyn
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
HC All - Trainees not covered for PF -2010.pdf
PF Ledger.xls