How is PF calculated from gross salary? what are all the components are included and list them out.
From India, Chennai
From India, Chennai
PF (Provident Fund) is calculated as a percentage of an employee's basic salary plus dearness allowance (DA), if any. The contribution is made by both the employer and the employee. The current PF contribution rate is 12% of the basic salary plus DA for both the employer and the employee. However, for establishments with fewer than 20 employees or meet specific criteria, the rate for employer contribution may vary.
Here are the components included in the calculation of PF from the gross salary:
Basic Salary: This is the fixed portion of the salary and typically forms the largest component. It does not include any allowances or bonuses.
Dearness Allowance (DA): This is an allowance paid to employees to compensate for the rise in the cost of living due to inflation. It may be a fixed amount or a percentage of the basic salary.
House Rent Allowance (HRA): While HRA is not included in the PF calculation, it's essential to note that only the basic salary and DA are considered for PF contributions. HRA is usually a portion of the salary provided to cover rental expenses and is exempt from PF calculation.
Other Allowances: Some organizations may provide additional allowances such as conveyance allowance, medical allowance, special allowance, etc. These allowances are not considered for PF calculation.
Bonus: Bonus payments are not considered for PF calculation.
Incentives: Incentive payments are not considered for PF calculation.
To calculate PF from the gross salary, you need to consider only the basic salary and DA. Here's how you can calculate it:
PF Contribution (Employee) = (Basic Salary + Dearness Allowance) * 0.12
PF Contribution (Employer) = (Basic Salary + Dearness Allowance) * 0.12
It's important to review the latest rules and regulations related to PF contributions as they may vary based on government mandates and employer policies.
From India, Mumbai
1Here are the components included in the calculation of PF from the gross salary:
Basic Salary: This is the fixed portion of the salary and typically forms the largest component. It does not include any allowances or bonuses.
Dearness Allowance (DA): This is an allowance paid to employees to compensate for the rise in the cost of living due to inflation. It may be a fixed amount or a percentage of the basic salary.
House Rent Allowance (HRA): While HRA is not included in the PF calculation, it's essential to note that only the basic salary and DA are considered for PF contributions. HRA is usually a portion of the salary provided to cover rental expenses and is exempt from PF calculation.
Other Allowances: Some organizations may provide additional allowances such as conveyance allowance, medical allowance, special allowance, etc. These allowances are not considered for PF calculation.
Bonus: Bonus payments are not considered for PF calculation.
Incentives: Incentive payments are not considered for PF calculation.
To calculate PF from the gross salary, you need to consider only the basic salary and DA. Here's how you can calculate it:
PF Contribution (Employee) = (Basic Salary + Dearness Allowance) * 0.12
PF Contribution (Employer) = (Basic Salary + Dearness Allowance) * 0.12
It's important to review the latest rules and regulations related to PF contributions as they may vary based on government mandates and employer policies.
From India, Mumbai
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HC All - Trainees not covered for PF -2010.pdf
PF Ledger.xls