Hi Folks,
In PF, we have the option for ceiling PF at 6500/-, allowing employees to benefit from a higher net take-home salary. If the gross salary is 16,000/- and the basic is 5,600/-, then 12% would be deducted on the basic. For others whose basic is 6500 or more, in that case, 12% on 6500 will be deducted.
Hope the problem is clear. Kindly email if the idea is still not clear at
.
Regards,
Sonal Mahajan
From India, Pune
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1In PF, we have the option for ceiling PF at 6500/-, allowing employees to benefit from a higher net take-home salary. If the gross salary is 16,000/- and the basic is 5,600/-, then 12% would be deducted on the basic. For others whose basic is 6500 or more, in that case, 12% on 6500 will be deducted.
Hope the problem is clear. Kindly email if the idea is still not clear at
Regards,
Sonal Mahajan
From India, Pune
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Employer’s cont is divided into two parts as 8.33% of monthly basic salary goes to employee pension scheme subject to maximum 541/- per month and rest 3.67% goes to employer cont. of pf.
Regds
RuchikA
From India
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Regds
RuchikA
From India
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Dear Ravi, Every this is correct, but where the matter of Pension fund there is the limit of Rs. 541/- or 8.33% of the basic salary, which ever is less. Rgds/Jitender
From India, New Delhi
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From India, New Delhi
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Hi,
If a person earns more than Rs. 6500/-, they are not covered under the Act. Most engineering companies do not adhere to this limit and generously contribute to PF as the employer's contribution, regardless of the earnings, as a welfare measure. This contribution is entirely voluntary and not statutory.
Similarly, in IT and ITES companies, employers provide the option to employees.
As you are aware, both the employer and employee equally contribute 12% of the basic wages. Out of this, 8.33% of the employer's contribution goes to the Employees' Pension Scheme, and the remaining 3.67% goes to PF. All 12% of the employee's contribution goes to the PF Account.
Nowadays, savvy employees prefer not to have indirect benefits like gratuity, especially since they may have to commit to a minimum period of 5 years, which is challenging in today's context. Therefore, contributions to indirect benefits are losing their significance. Furthermore, IT companies, ITES, and some engineering firms have introduced Flexi Benefit Pay, allowing prospective employees to decide on various components.
Please reach out to me for any clarifications.
Thanks & Regards,
Kalyan R
9840942232
From India, Madras
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If a person earns more than Rs. 6500/-, they are not covered under the Act. Most engineering companies do not adhere to this limit and generously contribute to PF as the employer's contribution, regardless of the earnings, as a welfare measure. This contribution is entirely voluntary and not statutory.
Similarly, in IT and ITES companies, employers provide the option to employees.
As you are aware, both the employer and employee equally contribute 12% of the basic wages. Out of this, 8.33% of the employer's contribution goes to the Employees' Pension Scheme, and the remaining 3.67% goes to PF. All 12% of the employee's contribution goes to the PF Account.
Nowadays, savvy employees prefer not to have indirect benefits like gratuity, especially since they may have to commit to a minimum period of 5 years, which is challenging in today's context. Therefore, contributions to indirect benefits are losing their significance. Furthermore, IT companies, ITES, and some engineering firms have introduced Flexi Benefit Pay, allowing prospective employees to decide on various components.
Please reach out to me for any clarifications.
Thanks & Regards,
Kalyan R
9840942232
From India, Madras
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Hi,
Regarding PF deduction, the following is the explanation from my side:
If the Basic Salary and DA are greater than 6500, then the salary for the purpose will be considered to be 6500, and accordingly, PF will be deducted. If the Basic Salary and DA are less than 6500, then PF will be deducted on the actual salary.
Again, if the PF of any organization is managed independently, then depending upon the policy laid down by the company, PF can be deducted on the actual basic, i.e., on basic higher than 6500.
Explanation: If Basic and DA are 10000, then PF will be deducted on 10000 only. But for EPS, the salary will be considered to be 6500 only.
If your query is solved, then it's okay; else, you can post your query again.
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Regarding PF deduction, the following is the explanation from my side:
If the Basic Salary and DA are greater than 6500, then the salary for the purpose will be considered to be 6500, and accordingly, PF will be deducted. If the Basic Salary and DA are less than 6500, then PF will be deducted on the actual salary.
Again, if the PF of any organization is managed independently, then depending upon the policy laid down by the company, PF can be deducted on the actual basic, i.e., on basic higher than 6500.
Explanation: If Basic and DA are 10000, then PF will be deducted on 10000 only. But for EPS, the salary will be considered to be 6500 only.
If your query is solved, then it's okay; else, you can post your query again.
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PF & ESI
Dear Friend,
The following information about PF & ESI may be conducive to you.
PF
Employee contribution: 12%
Employer contribution: 13.61% (Ceiling basic price Rs. 6500)
A/c No. 01 - Basic 12% (Employee) + Basic 3.67% (Employer) = 15.67% goes into Employee's PF account
A/c No. 02 - 1.10% admin charges of PF department (Paid by employer)
A/c No. 10 - 8.33% (Employer) goes into Pension Scheme
A/c No. 21 - 0.50% EDLI (admin. charges of PF department)
A/c No. 22 - 0.01% admin charges of PF department (Paid by employer)
PF contribution is submitted before the 15th of every month through challan in the bank.
ESI
Employee contribution: 1.75%
Employer contribution: 4.75%
Total: 6.50%
ESI contribution is submitted before the 20th of every month through challan in the bank.
Regards,
Pankaj Sharma
09928070658
sharma.ji@yahoo.com
From India, Chandigarh
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Dear Friend,
The following information about PF & ESI may be conducive to you.
PF
Employee contribution: 12%
Employer contribution: 13.61% (Ceiling basic price Rs. 6500)
A/c No. 01 - Basic 12% (Employee) + Basic 3.67% (Employer) = 15.67% goes into Employee's PF account
A/c No. 02 - 1.10% admin charges of PF department (Paid by employer)
A/c No. 10 - 8.33% (Employer) goes into Pension Scheme
A/c No. 21 - 0.50% EDLI (admin. charges of PF department)
A/c No. 22 - 0.01% admin charges of PF department (Paid by employer)
PF contribution is submitted before the 15th of every month through challan in the bank.
ESI
Employee contribution: 1.75%
Employer contribution: 4.75%
Total: 6.50%
ESI contribution is submitted before the 20th of every month through challan in the bank.
Regards,
Pankaj Sharma
09928070658
sharma.ji@yahoo.com
From India, Chandigarh
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Dear all,
Kindly help me with these queries.
a) A person worked for 15 months in an ITES Company and has been out of work for the past 8 months. He withdrew his PF during this time and is about to join another organization. If he received his 12% and the Company's 3.67%, how will he get the remaining 8.33% and when?
b) If an executive's in-hand salary is ₹19,500, what should be the breakdown, i.e., Basic Salary, House Rent Allowance, Variable Allowance, etc.? Is there a rule regarding this breakdown, or can it vary from Company to Company? Can such an employee opt out of PF? Please explain.
Thanks and Regards,
Neeraj
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Kindly help me with these queries.
a) A person worked for 15 months in an ITES Company and has been out of work for the past 8 months. He withdrew his PF during this time and is about to join another organization. If he received his 12% and the Company's 3.67%, how will he get the remaining 8.33% and when?
b) If an executive's in-hand salary is ₹19,500, what should be the breakdown, i.e., Basic Salary, House Rent Allowance, Variable Allowance, etc.? Is there a rule regarding this breakdown, or can it vary from Company to Company? Can such an employee opt out of PF? Please explain.
Thanks and Regards,
Neeraj
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when an employee will get the pension amt i hope he has to serve the co. for atleast an year then only he can get his pension amt is that rite ? pls clear my doubt.. Advanced wishes M.Bharath
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Dear Neeraj,
Explanation for Point a:
8.33% is non-withdrawable. He cannot withdraw that amount. This percentage goes towards EPS (Employee Pension Scheme). He will get this amount back as a monthly pension on completion at 58 years, i.e., on superannuation. For more clarification, you can call me at 9831000509.
Explanation for Point b:
Every company has its unique salary structure. So, if his in-hand salary is 19500, it cannot be said what the individual breakup may be. Regarding HRA, normally, it is 40% or 50% of Basic+DA. It's not a thumb rule; it can still vary from company to company.
Dear M Bharat,
Pensionable service is continuous service of 10 years. Only then an employee can be eligible for a pension. But here the catch is that he will get a pension only on superannuation or after 50 years of age at a reduced amount. For any clarification, you can also call me at the above-mentioned address.
Dear Pankaj, your explanation is really great.
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Explanation for Point a:
8.33% is non-withdrawable. He cannot withdraw that amount. This percentage goes towards EPS (Employee Pension Scheme). He will get this amount back as a monthly pension on completion at 58 years, i.e., on superannuation. For more clarification, you can call me at 9831000509.
Explanation for Point b:
Every company has its unique salary structure. So, if his in-hand salary is 19500, it cannot be said what the individual breakup may be. Regarding HRA, normally, it is 40% or 50% of Basic+DA. It's not a thumb rule; it can still vary from company to company.
Dear M Bharat,
Pensionable service is continuous service of 10 years. Only then an employee can be eligible for a pension. But here the catch is that he will get a pension only on superannuation or after 50 years of age at a reduced amount. For any clarification, you can also call me at the above-mentioned address.
Dear Pankaj, your explanation is really great.
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PF Ledger.xls