Hello All,
I need a simple clarity on PF deduction. I am known to the %age deduction of PF on Salary. However, to state my question in a simple manner I'll provide with an illustration: If an employee in a telecalling set-up is hired at say 4K + Incentives (which has no upper cap mentioned and is also not given any salary annxure). Therefore, what I understant is that PF can and should be deducted on the 60% of 4K. But if an employee ends up earning 1K as incentives then can PF be deducted at 60% of 5K? And if another month if he does not earn any incentives than again the PF on 4K. If later he earns incentives say 1500 than can PF be deducted at 5.5K considering it as gross salary? Can PF be really deducted at variable Gross? Pls treat this as urgent...
And yes, thanks in advance for your expert advise.
Dharmendra
Posted via Mobile Device
From India, Mumbai
I need a simple clarity on PF deduction. I am known to the %age deduction of PF on Salary. However, to state my question in a simple manner I'll provide with an illustration: If an employee in a telecalling set-up is hired at say 4K + Incentives (which has no upper cap mentioned and is also not given any salary annxure). Therefore, what I understant is that PF can and should be deducted on the 60% of 4K. But if an employee ends up earning 1K as incentives then can PF be deducted at 60% of 5K? And if another month if he does not earn any incentives than again the PF on 4K. If later he earns incentives say 1500 than can PF be deducted at 5.5K considering it as gross salary? Can PF be really deducted at variable Gross? Pls treat this as urgent...
And yes, thanks in advance for your expert advise.
Dharmendra
Posted via Mobile Device
From India, Mumbai
Dharmendra,
MAke the proper salary structure for your staff including a Basic Salary ans Allowances and Incentives. In the situation illustrated by you, remember that the basic salary shall be more than the minimum wages prevailing in the state in which the establishment is situated. Deduct PF @12% of basic salary for the employee part.
Here are few details for your record:
Calculations: P.F from Basic
Employee: 12% (P.F)
Employer: 3.67% Provident Fund (A/c 1) + 8.33% Pension (A/c 10) + 1.10% Admin Charges on
PF (A/c 2) + 0.50% EDLI (A/c 21) + 0.01% Admin Charges on EDLI (A/c 22)
=>13.61% on basic
* Pension (8.33% or 541/- which ever less)
Regular activities:
1. Time of joining: Form 2: Employee should fill, at the time of joining, nomination & Declaration form.
Form 2, includes the following
· Name of the employee
· Parent/spouse name
· Date of Birth
· Sex
· Marital Status
· AC No
· Address
· Names, address, relation, Share for each etc
Also for changing nominee names Form 2 is used. His eligibility begins on the date of joining the firm. Submitted along with form-5.
2. Withdrawers/Dead : Form 10c (pension) & 19 PF
Form 19 is used for withdrawing PF amount. Employee and parent/spouse name, name of the establishment, Ac no, Reasons for leaving service, Contribution for current financial year etc. Form 10 is used for pension withdrawal.
Form 19: Employee should fill, all information like Bank a/c, name, DOJ…with signature and then
Employer like present year contributions, DOR…for PF Fund – Due date: After 60 Days
of Resignation)
Form 10C: Employee should fill, all information like Bank a/c, name, DOJ…with signature and
then employer like present year contributions, DOR…for Pension Due date: After 60 Days of Resignation
3. Transfer : Form 13
Form 13 is used for transferring an employee AC from one company to another. Both employer and employee have to specify his name, PF AC no, Position etc and submitted with a covering letter (consolidated list of employees). Photocopy of the above is kept in PF file for transfer.
4. Employee register 3A, 6
5. For advance : Form 31
6. In case of employee expired / dead :
Process details
Form 10 D (For claiming benefits under Pension)
Employee should fill like Expired/late employee name, nomination name, details, Nomination Bank a/c…for monthly Pension
Form 20 (For Claiming EPF Contributions)
Employee should fill like Expired/late employee name, nomination name, details,
Nomination Bank a/c…for withdrawal of PF Fund (Incase of Death of a member
Form 5 IF (For Claiming EDLI benefits, nominee will get benefit)
EDLI for death case, nominee will get benefit.
7. Form 9 (Register of employers - Application for review filed under)
Monthly Remittance / Challans:
1. Challans every month before 15th (4 copies/ quadruplicate)
2. All A/c (A/c Nos-1,2,10,21&22)
3. To Bank
4. both employer & employee contribution
· Account group no eg RJ/ 1246/01 (state-first two alphabets /city/acc no: of the company)
· Month
· Total number of subscribers
· Total wages due for each account (wages on which calculations are done)
· Each accounts totals (consolidated amount with employer and employee share)
· Name of the establishment and address
· Name and signature of the depositor
· Name of the bank, mode and date of remittance etc
Challan is submitted tp PF office along with form-12A every month.
Monthly returns:
1. Form 12 A, with all information and employees list of contribution before 25th
2. With Form 5 (new joiners list) , form 10 (resigned employees list), challans copy
3. Information about last month employees, new & resigned employees & this month staff.
Form 5
· Name of the establishment and address
· Month
· Code no: of the factory
· A c no:
· Name of new employees
· Fathers or Husband name in case of married women
· Date of birth
· Sex
· Date of joining the fund
· Total period of pervious services as on the date of joining the fund
Form 10
· Name of the establishment and address
· Month
· Code no: of the establishment
· A c no:
· Name of member who is leaving
· Fathers or Husband name in case of married women
· Date of leaving service
· Reasons for leaving service
· Signature of authorized officer and stamp of the establishment
Cross checking the above is done with the salary statement which includes the number and name all current employees.
Form 12 A:
· Name of the establishment and address
· Currency period and month (April yr to march yr)
· Statutory rate of contribution (12%)
· Group code (NA for unexampled establishment. Establishment having more than 1000 have to keep a . PF trust and have to specify the group code)
· Total wages due for each account (wages on which calculations are done)
· Amount of contribution and amount remitted (consolidated amount with employer and employee share)
· Date of remittance
· Total number of subscribers for the current month.
· Name and address of the bank in which the amount is remitted.
· Details of subscribers for E.P.F, PF, EDLI
--No of subscribers as per last month
--No of new subscribers (vide Form 5)
--No of subscribers left service (vide Form 10)
--Total no of subscribers (After adding and subtracting the new and retired employees with,
the number should tally with monthly list of employees)
Annul returns:
1. Form 3 A (Individual Computation sheet)
2. Form 6 A (Consolidated Annual Contribution Statement)
3. before 30th April every year
Form 6A:
· Currency period and month (April yr to march yr)
· Name of the establishment and address
· Code no: of the establishment
· No: of member voluntary contributing at a higher rate
· AC No of each employee followed by their name, annual salary, annual contribution, employer contribution, refund of advance, rate of voluntary contribution.
· This grand total should tally with all form 12 A and challans totals.
Form 3A: Register
This form is filled up for each employee stating his each monthly salary, contribution, Employer share, Refund of advance, No of days/period of non contributing service, if any (eg. unauthorised leave). If the employee is resigned during that financial year then the date of leaving service and reasons for leaving service should be specified in this form. Using Form 3A, form 6 A is filled up and crosschecking is done with all challans and 12 A forms.
* Muster Roll * Wage Register * Inspection Book * Cash Book, Voucher & Ledger * PF work sheet
Forms:
Form 3: Contribution Cards - Individual Computation sheet contains all PF amts month-wise.
Form 3 A: Contribution Cards – Form
Form 4: Contribution card for employees other than monthly paid employees - Form
Form 5 A: Return of Ownership to be sent to the Regional Commissioner - Form
Form 6: Return of the Contribution Cards sent to the Commissioner on the expiry of the period
of currency – Form
Form 6 A: Consolidated Annual Contribution Statement - Consolidated Computation Sheet,
contains total employees list, there total half yearly information. Form 6 is top sheet
and 6A is attachments.
Form 9: Register of employees - Application for review filed under.
Register 3: Individual Computation, there Gross salary, Basic, DA, attendance, PF, Pension
---------------------------------------------------------------
From India, Jaipur
34MAke the proper salary structure for your staff including a Basic Salary ans Allowances and Incentives. In the situation illustrated by you, remember that the basic salary shall be more than the minimum wages prevailing in the state in which the establishment is situated. Deduct PF @12% of basic salary for the employee part.
Here are few details for your record:
Calculations: P.F from Basic
Employee: 12% (P.F)
Employer: 3.67% Provident Fund (A/c 1) + 8.33% Pension (A/c 10) + 1.10% Admin Charges on
PF (A/c 2) + 0.50% EDLI (A/c 21) + 0.01% Admin Charges on EDLI (A/c 22)
=>13.61% on basic
* Pension (8.33% or 541/- which ever less)
Regular activities:
1. Time of joining: Form 2: Employee should fill, at the time of joining, nomination & Declaration form.
Form 2, includes the following
· Name of the employee
· Parent/spouse name
· Date of Birth
· Sex
· Marital Status
· AC No
· Address
· Names, address, relation, Share for each etc
Also for changing nominee names Form 2 is used. His eligibility begins on the date of joining the firm. Submitted along with form-5.
2. Withdrawers/Dead : Form 10c (pension) & 19 PF
Form 19 is used for withdrawing PF amount. Employee and parent/spouse name, name of the establishment, Ac no, Reasons for leaving service, Contribution for current financial year etc. Form 10 is used for pension withdrawal.
Form 19: Employee should fill, all information like Bank a/c, name, DOJ…with signature and then
Employer like present year contributions, DOR…for PF Fund – Due date: After 60 Days
of Resignation)
Form 10C: Employee should fill, all information like Bank a/c, name, DOJ…with signature and
then employer like present year contributions, DOR…for Pension Due date: After 60 Days of Resignation
3. Transfer : Form 13
Form 13 is used for transferring an employee AC from one company to another. Both employer and employee have to specify his name, PF AC no, Position etc and submitted with a covering letter (consolidated list of employees). Photocopy of the above is kept in PF file for transfer.
4. Employee register 3A, 6
5. For advance : Form 31
6. In case of employee expired / dead :
Process details
Form 10 D (For claiming benefits under Pension)
Employee should fill like Expired/late employee name, nomination name, details, Nomination Bank a/c…for monthly Pension
Form 20 (For Claiming EPF Contributions)
Employee should fill like Expired/late employee name, nomination name, details,
Nomination Bank a/c…for withdrawal of PF Fund (Incase of Death of a member
Form 5 IF (For Claiming EDLI benefits, nominee will get benefit)
EDLI for death case, nominee will get benefit.
7. Form 9 (Register of employers - Application for review filed under)
Monthly Remittance / Challans:
1. Challans every month before 15th (4 copies/ quadruplicate)
2. All A/c (A/c Nos-1,2,10,21&22)
3. To Bank
4. both employer & employee contribution
· Account group no eg RJ/ 1246/01 (state-first two alphabets /city/acc no: of the company)
· Month
· Total number of subscribers
· Total wages due for each account (wages on which calculations are done)
· Each accounts totals (consolidated amount with employer and employee share)
· Name of the establishment and address
· Name and signature of the depositor
· Name of the bank, mode and date of remittance etc
Challan is submitted tp PF office along with form-12A every month.
Monthly returns:
1. Form 12 A, with all information and employees list of contribution before 25th
2. With Form 5 (new joiners list) , form 10 (resigned employees list), challans copy
3. Information about last month employees, new & resigned employees & this month staff.
Form 5
· Name of the establishment and address
· Month
· Code no: of the factory
· A c no:
· Name of new employees
· Fathers or Husband name in case of married women
· Date of birth
· Sex
· Date of joining the fund
· Total period of pervious services as on the date of joining the fund
Form 10
· Name of the establishment and address
· Month
· Code no: of the establishment
· A c no:
· Name of member who is leaving
· Fathers or Husband name in case of married women
· Date of leaving service
· Reasons for leaving service
· Signature of authorized officer and stamp of the establishment
Cross checking the above is done with the salary statement which includes the number and name all current employees.
Form 12 A:
· Name of the establishment and address
· Currency period and month (April yr to march yr)
· Statutory rate of contribution (12%)
· Group code (NA for unexampled establishment. Establishment having more than 1000 have to keep a . PF trust and have to specify the group code)
· Total wages due for each account (wages on which calculations are done)
· Amount of contribution and amount remitted (consolidated amount with employer and employee share)
· Date of remittance
· Total number of subscribers for the current month.
· Name and address of the bank in which the amount is remitted.
· Details of subscribers for E.P.F, PF, EDLI
--No of subscribers as per last month
--No of new subscribers (vide Form 5)
--No of subscribers left service (vide Form 10)
--Total no of subscribers (After adding and subtracting the new and retired employees with,
the number should tally with monthly list of employees)
Annul returns:
1. Form 3 A (Individual Computation sheet)
2. Form 6 A (Consolidated Annual Contribution Statement)
3. before 30th April every year
Form 6A:
· Currency period and month (April yr to march yr)
· Name of the establishment and address
· Code no: of the establishment
· No: of member voluntary contributing at a higher rate
· AC No of each employee followed by their name, annual salary, annual contribution, employer contribution, refund of advance, rate of voluntary contribution.
· This grand total should tally with all form 12 A and challans totals.
Form 3A: Register
This form is filled up for each employee stating his each monthly salary, contribution, Employer share, Refund of advance, No of days/period of non contributing service, if any (eg. unauthorised leave). If the employee is resigned during that financial year then the date of leaving service and reasons for leaving service should be specified in this form. Using Form 3A, form 6 A is filled up and crosschecking is done with all challans and 12 A forms.
* Muster Roll * Wage Register * Inspection Book * Cash Book, Voucher & Ledger * PF work sheet
Forms:
Form 3: Contribution Cards - Individual Computation sheet contains all PF amts month-wise.
Form 3 A: Contribution Cards – Form
Form 4: Contribution card for employees other than monthly paid employees - Form
Form 5 A: Return of Ownership to be sent to the Regional Commissioner - Form
Form 6: Return of the Contribution Cards sent to the Commissioner on the expiry of the period
of currency – Form
Form 6 A: Consolidated Annual Contribution Statement - Consolidated Computation Sheet,
contains total employees list, there total half yearly information. Form 6 is top sheet
and 6A is attachments.
Form 9: Register of employees - Application for review filed under.
Register 3: Individual Computation, there Gross salary, Basic, DA, attendance, PF, Pension
---------------------------------------------------------------
From India, Jaipur
Posted via Mobile Device
Thanks Arun for such a detailed response.
I understand that there is very much the need of having a proper salary structure. But, what I explained is being practiced at our vendor/associate's establishment. And so, I need to know if this is in sync with the EPF laws. Therefore, as of now until they come up with a structured payout which they don't seem to come up with. Please advise if what they are doing is correct or not. I am in an extensive debate with them since long.
From India, Mumbai
Thanks Arun for such a detailed response.
I understand that there is very much the need of having a proper salary structure. But, what I explained is being practiced at our vendor/associate's establishment. And so, I need to know if this is in sync with the EPF laws. Therefore, as of now until they come up with a structured payout which they don't seem to come up with. Please advise if what they are doing is correct or not. I am in an extensive debate with them since long.
From India, Mumbai
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Clarification On PF Deduction For Indian Employees (International Workers) Returning From Foreig.pdf