Dear Rahul,
EPF Ceiling Limit:
Epf ceiling limit is fixed to 6500/-.The employer is liable to pay contribution only on 6500/- Whatever is the basic salary.
Calculation of Employees provident fund :
1) Let us calculate the contribution of an employee who is getting a basic salary of Rs 3500/-
Contribution Towards Calculation Amount
EPF Employees share 3500 x 12% 420
EPS Employer share 3500 x 8.33% 292
EPF employer share 3500 x 3.67% 128
EDLI charges 3500 x 0.5% 18
EPF Admin charges 3500 x 1.1% 39
EDLI Admin charges 3500 x 0.01% 0.35 ( round up to Rs 1/-)
The above calculation is easy and there is no complication.
Calculation of EPF for employees getting a basic salary over and above the ceiling limit 6500/-In such cases companies uses different method for calculation as per their pay roll policy.
Consider an employee getting a basic salary of 7500/-We can calculate it in different ways. The only thing you should take care is, EPS is calculated only up to 6500/- that means the maximum amount is fixed to Rs 541.00. The three methods mentioned below are based on the above example.
Method-1
If your company consider total basic salary above the limit fixed 6500.00 for PF calculation
Contribution Towards Calculation Amount
EPF Employees share 7500 x 12% 900
EPS Employer share 6500 x 8.33% 541
EPF employer share 7500 x 12% (-) 541 359
EDLI charges 7500 x 0.5% 38
EPF Admin charges 7500 x 1.1% 83
EDLI Admin charges 7500 x 0.01% 0.75 ( Round up to Rs 1/-)
I will explain how Employer contribution of EPS and EPF is calculated.
Employer is decided to contribute on total basic salary which is 12 % on 7500.00 equal to 900.00
EPS Share is fixed to 541.00
Balance (900-541) goes to EPF account 359.00
Total share 900.00
Out of Rs 900.00 EPS share is RS 541/- which is fixed for a basic salary greater than 6500/-.
The balance amount is 900-541 = 359.00 which willgo to EPF account.
You may be thinking that, what about 3.67%?, Here you don’t need to care about it.
Method2
Some companies follows the below method in which employee share is calculated on 7500/- and employer share is calculated on up limit Rs 6500/-
Contribution Towards Calculation Amount
EPF Employees share 7500 x 12% 900
EPS Employer share 6500 x 8.33% 541
EPF employer share 6500 x 3.67% 239
EDLI charges 6500 x 0.5% 33
EPF Admin charges 6500 x 1.1% 72
EDLI Admin charges 6500 x 0.01% 0.65 ( Round up to Rs 1/-)
Method-3
Some are calculating both employer and employee shares on 6500/- in spite of higher basic salary than 6500.00
Contribution Towards Calculation Amount
EPF Employees share 6500 x 12% 780
EPS Employer share 6500 x 8.33% 541
EPF employer share 6500 x 3.67% 239
EDLI charges 6500 x 0.5% 33
EPF Admin charges 6500 x 1.1% 72
EDLI Admin charges 6500 x 0.01% 0.65 ( Round up to Rs 1/-)
Detail of Accounts under PF :
There are five accounts
1) AC 1 (PF)
(BA+DA) 12% Employee share
(BA+DA) 3.67% Employer share
2) AC 2 10 (Pension)
(BA+DA) 8.33% Employer share
3) AC 2 (Administration Charges)
(BA+DA) 1.1% Employer share
4) AC 21 (EDLI -Employees Deposit Link Insurance)
(BA+DA) 0.5%Employer share
5) AC 22 (EDLI Administration charges)
(BA+DA) 0.01% Employer share
Regards,
Boopathi.
From India, Coimbatore
EPF Ceiling Limit:
Epf ceiling limit is fixed to 6500/-.The employer is liable to pay contribution only on 6500/- Whatever is the basic salary.
Calculation of Employees provident fund :
1) Let us calculate the contribution of an employee who is getting a basic salary of Rs 3500/-
Contribution Towards Calculation Amount
EPF Employees share 3500 x 12% 420
EPS Employer share 3500 x 8.33% 292
EPF employer share 3500 x 3.67% 128
EDLI charges 3500 x 0.5% 18
EPF Admin charges 3500 x 1.1% 39
EDLI Admin charges 3500 x 0.01% 0.35 ( round up to Rs 1/-)
The above calculation is easy and there is no complication.
Calculation of EPF for employees getting a basic salary over and above the ceiling limit 6500/-In such cases companies uses different method for calculation as per their pay roll policy.
Consider an employee getting a basic salary of 7500/-We can calculate it in different ways. The only thing you should take care is, EPS is calculated only up to 6500/- that means the maximum amount is fixed to Rs 541.00. The three methods mentioned below are based on the above example.
Method-1
If your company consider total basic salary above the limit fixed 6500.00 for PF calculation
Contribution Towards Calculation Amount
EPF Employees share 7500 x 12% 900
EPS Employer share 6500 x 8.33% 541
EPF employer share 7500 x 12% (-) 541 359
EDLI charges 7500 x 0.5% 38
EPF Admin charges 7500 x 1.1% 83
EDLI Admin charges 7500 x 0.01% 0.75 ( Round up to Rs 1/-)
I will explain how Employer contribution of EPS and EPF is calculated.
Employer is decided to contribute on total basic salary which is 12 % on 7500.00 equal to 900.00
EPS Share is fixed to 541.00
Balance (900-541) goes to EPF account 359.00
Total share 900.00
Out of Rs 900.00 EPS share is RS 541/- which is fixed for a basic salary greater than 6500/-.
The balance amount is 900-541 = 359.00 which willgo to EPF account.
You may be thinking that, what about 3.67%?, Here you don’t need to care about it.
Method2
Some companies follows the below method in which employee share is calculated on 7500/- and employer share is calculated on up limit Rs 6500/-
Contribution Towards Calculation Amount
EPF Employees share 7500 x 12% 900
EPS Employer share 6500 x 8.33% 541
EPF employer share 6500 x 3.67% 239
EDLI charges 6500 x 0.5% 33
EPF Admin charges 6500 x 1.1% 72
EDLI Admin charges 6500 x 0.01% 0.65 ( Round up to Rs 1/-)
Method-3
Some are calculating both employer and employee shares on 6500/- in spite of higher basic salary than 6500.00
Contribution Towards Calculation Amount
EPF Employees share 6500 x 12% 780
EPS Employer share 6500 x 8.33% 541
EPF employer share 6500 x 3.67% 239
EDLI charges 6500 x 0.5% 33
EPF Admin charges 6500 x 1.1% 72
EDLI Admin charges 6500 x 0.01% 0.65 ( Round up to Rs 1/-)
Detail of Accounts under PF :
There are five accounts
1) AC 1 (PF)
(BA+DA) 12% Employee share
(BA+DA) 3.67% Employer share
2) AC 2 10 (Pension)
(BA+DA) 8.33% Employer share
3) AC 2 (Administration Charges)
(BA+DA) 1.1% Employer share
4) AC 21 (EDLI -Employees Deposit Link Insurance)
(BA+DA) 0.5%Employer share
5) AC 22 (EDLI Administration charges)
(BA+DA) 0.01% Employer share
Regards,
Boopathi.
From India, Coimbatore
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EPF ON LINE REGN. USER MANUAL.pdf