Hi, I am working in ITES as an HR professional, and I have a question regarding the calculation of PF. Can anyone tell me if there is any other method for calculating PF besides the standard 12% on the basic salary? Is it correct to calculate PF as 70% of the gross pay multiplied by 12% to determine the PF amount?
Thank you.
From India, Madras
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3Thank you.
From India, Madras
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Please refer to the contribution rates below:
PF Contribution Rates
PF ➔ 12% of Basic. For any employee receiving a basic salary exceeding ₹6,500, you can cap the PF at ₹780.
Employees:
- Employer: 13.61%
- 3.67% PF Fund
- 8.33% Pension Fund
- 1.10% PF Admin Charges
- 0.50% EDLI
- 0.01% EDLI Admin charge
For any further clarification, feel free to write or discuss.
From India, Mumbai
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PF Contribution Rates
PF ➔ 12% of Basic. For any employee receiving a basic salary exceeding ₹6,500, you can cap the PF at ₹780.
Employees:
- Employer: 13.61%
- 3.67% PF Fund
- 8.33% Pension Fund
- 1.10% PF Admin Charges
- 0.50% EDLI
- 0.01% EDLI Admin charge
For any further clarification, feel free to write or discuss.
From India, Mumbai
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From your calculation, I can derive that you are considering BASIC as 70% of your gross salary and calculating 12% of the basic as PF, which is absolutely fine. First, you need to fix your basic, which depends on your compensation structure.
For any further clarification, feel free to write or discuss.
Regards
From India, Mumbai
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For any further clarification, feel free to write or discuss.
Regards
From India, Mumbai
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But i checked whether its been followed like that but for one or two its correct(70% as basic),for others they have calculated PF as i mentioned.
From India, Madras
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From India, Madras
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I mean here basic is not fixed as 70% of gross pay,but PF is calculated as 70% of Gross pay *12%.So i just want to make sure is it correct if PF is calculated like this.
From India, Madras
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From India, Madras
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Hi, PF is always calculated on basic i.e. 12%. First, fix your basic calculation. I have a doubt on your calculation.
From India, Mumbai
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From India, Mumbai
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Prasenjit Mitra, Suppose voluntary provision the basic amount even exceeds Rs.6500/- and we have to pay the administrative charges on the total wages. Raju
From India, Secunderabad
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From India, Secunderabad
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First, you need to restructure your pay structure and set the basic salary at 50% of the gross salary. Calculate 12% of the basic salary for the Provident Fund (PF), and limit PF deductions to Rs 780 for any employee receiving a basic salary exceeding Rs 6500.
From India, Hyderabad
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From India, Hyderabad
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Apart from the standard 12% of P.F., we can even deduct up to the full 100% P.F. on the basic salary. The clause for this deduction is that the employee should write to their employer, expressing their willingness to contribute as V.P.F., i.e., voluntary P.F.
Voluntary P.F. Contribution
Voluntary P.F. could be a maximum of Basic & DA, up to the full 100%, but the employer is not obligated to contribute the same amount. The employer's contribution could be either ₹6,500.00 or 12% of the employee's basic salary.
I hope this clears up your doubts.
Regards,
From India, Calcutta
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Voluntary P.F. Contribution
Voluntary P.F. could be a maximum of Basic & DA, up to the full 100%, but the employer is not obligated to contribute the same amount. The employer's contribution could be either ₹6,500.00 or 12% of the employee's basic salary.
I hope this clears up your doubts.
Regards,
From India, Calcutta
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PROVIDENT FUND CALCULATION.xls
PF Calculation Sheet To The Subscribers At the Time Of Provident Fund Withdrawal.pdf