Dear friends, Pl find attached circular dated 18.3.2014 issued by EPFO on the subject. Thanks
From India, Malappuram
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1454From India, Malappuram
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Dear Mr. Agrawal,
Thank you for sharing such a knowledgeable circular with all of us, especially as it was just issued yesterday, and you promptly shared it with all members. It is very much appreciated.
However, please correct me if I am wrong, but it seems that this circular is intended for the internal department, instructing staff to avoid unnecessary litigation matters by misunderstanding that the employer is doing anything wrong by considering PF contribution in CTC. It is not stated that PF shall not be applicable on CTC; it is only specified how it is logically correct to consider it in CTC.
Please correct me if I am mistaken.
Regards,
Tushar Swar.
From India, Mumbai
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Thank you for sharing such a knowledgeable circular with all of us, especially as it was just issued yesterday, and you promptly shared it with all members. It is very much appreciated.
However, please correct me if I am wrong, but it seems that this circular is intended for the internal department, instructing staff to avoid unnecessary litigation matters by misunderstanding that the employer is doing anything wrong by considering PF contribution in CTC. It is not stated that PF shall not be applicable on CTC; it is only specified how it is logically correct to consider it in CTC.
Please correct me if I am mistaken.
Regards,
Tushar Swar.
From India, Mumbai
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Dear Friends, Kindly explain in future we need to deduct EPF only for Basic+DA or Gross......if Basic+DA below 6500/- what we need to do.... Regards, Suresh Kumar M
From India, Coimbatore
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From India, Coimbatore
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Dear Sir,
Thank you for sharing the circular issued by the Ministry of Labour on the Provident Fund. I would like to inquire if some companies are conducting their business against the government and PF rules and are not following them properly as per government norms. Even though the PF contribution is only 3 to 5% of the basic salary and is deposited to the PF office, how is it possible that the PF Inspector is overlooking the contribution percentage from both employees and employers?
For example, if the basic salary is 23295, HRA 11648, Conveyance 800, and PF 780, the PF contribution should be 12% of the basic salary. Therefore, could you confirm if the above example is correct? I am questioning not only the organization but also the inspection process and the commissioners of Delhi/NCR. How are they neglecting such organizations with over 1200 employees?
These concerns arose after reviewing the circular. Could you please shed some light on this matter?
Regards,
Silva
From India, Delhi
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Thank you for sharing the circular issued by the Ministry of Labour on the Provident Fund. I would like to inquire if some companies are conducting their business against the government and PF rules and are not following them properly as per government norms. Even though the PF contribution is only 3 to 5% of the basic salary and is deposited to the PF office, how is it possible that the PF Inspector is overlooking the contribution percentage from both employees and employers?
For example, if the basic salary is 23295, HRA 11648, Conveyance 800, and PF 780, the PF contribution should be 12% of the basic salary. Therefore, could you confirm if the above example is correct? I am questioning not only the organization but also the inspection process and the commissioners of Delhi/NCR. How are they neglecting such organizations with over 1200 employees?
These concerns arose after reviewing the circular. Could you please shed some light on this matter?
Regards,
Silva
From India, Delhi
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Dear Silva,
As per my understanding, the EPF ceiling is Rs. 6,500 (6500*12% = Rs. 780). If the amount exceeds the ceiling, the employer is not required to cover the basic amount. Please correct me if I am wrong.
Regards,
Suresh Kumar M
From India, Coimbatore
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As per my understanding, the EPF ceiling is Rs. 6,500 (6500*12% = Rs. 780). If the amount exceeds the ceiling, the employer is not required to cover the basic amount. Please correct me if I am wrong.
Regards,
Suresh Kumar M
From India, Coimbatore
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Dear Mr. Suresh,
Thank you for your kind concern and for highlighting the issue. You are also correct. However, I could not understand the logic behind this. Is there any article that indicates or recommends this?
Thank you in advance for your kind reply.
Regards,
Silva Kumar
From India, Delhi
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Thank you for your kind concern and for highlighting the issue. You are also correct. However, I could not understand the logic behind this. Is there any article that indicates or recommends this?
Thank you in advance for your kind reply.
Regards,
Silva Kumar
From India, Delhi
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Dear Senior, please tell me first that employer can share epf in CTC. (employer contribution) Regards Dhananjay Patil
From India, New Delhi
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From India, New Delhi
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Thanks for sharing such knowedgable
Job Placement & HR Training Services – Punchkula & Ludhiana
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From India, Taramani
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Job Placement & HR Training Services – Punchkula & Ludhiana
Dream Destination the Complete HR-Solution Providers also brings first time in northern India the Latest Concepts of HR, its Policies & Processes with HR-Manual and Complete Labour Laws like ESI, EPF, Factory Act, Bonus and Gratuity Act & other Labour Laws as along with Export Audit compliance's for Export Industries from Selection to Separation.Sunday Classes (100% Placement till date)
Dream Destination Placement & Consultancy Services®
SCO-3, IInd Floor, Sector-11, Punchkula near Chandigarh
Street No.10, Shivaji Nagar, Shingar Road, Ludhiana-Pb
Dream Destination
Call me at: 9023277081 for any clarification and information
From India, Taramani
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Dear Team,
Warm greetings!!!
I appreciate Agrawal for posting the information.
Thanks a ton.
For PF:
PF is always calculated as 12% on Basic + DA + Retaining Allowances if any. There are two ways:
1. 12% on the above irrespective of your Basic.
2. 12% on the above but maximum up to Rs 6500/- on Basic or Actuals that are less than Rs 6500/-. Hence we do take as Rs 780/-. However, there is VDF (Voluntary Deduction Provident Fund). Only the Employee can contribute more than 12% on the above. Here the employer pays only Rs 780/- or as per the 1st Clause if applicable. The employer does not pay VDF.
Employer and Employee PF contributions are added in CTC when the appointment Letter/Offer Letter is issued, totaling 25.61%. In actuality, this includes 12% employee contribution, 12% Employer Contribution (8.33% - Employee Pension Fund and 3.67% again added with Employee contribution. On EPF (Employee Pension Fund), a maximum of Rs 541/- was deposited, more than that deposited in Employee Contribution), 1.1% of Basic as Admin Exp, 0.5% EDLI to be calculated on Rs 6500/- only if the basic is more than Rs 6500/- if less than on Actuals, 0.01% Inspection Charges to be calculated on Rs 6500/- only if the basic is more than Rs 6500/- if less than on Actuals.
Please let me know if you need any further information in this regard.
Warm regards,
Pranab Chakraborty
9404384433
From India, Mumbai
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Warm greetings!!!
I appreciate Agrawal for posting the information.
Thanks a ton.
For PF:
PF is always calculated as 12% on Basic + DA + Retaining Allowances if any. There are two ways:
1. 12% on the above irrespective of your Basic.
2. 12% on the above but maximum up to Rs 6500/- on Basic or Actuals that are less than Rs 6500/-. Hence we do take as Rs 780/-. However, there is VDF (Voluntary Deduction Provident Fund). Only the Employee can contribute more than 12% on the above. Here the employer pays only Rs 780/- or as per the 1st Clause if applicable. The employer does not pay VDF.
Employer and Employee PF contributions are added in CTC when the appointment Letter/Offer Letter is issued, totaling 25.61%. In actuality, this includes 12% employee contribution, 12% Employer Contribution (8.33% - Employee Pension Fund and 3.67% again added with Employee contribution. On EPF (Employee Pension Fund), a maximum of Rs 541/- was deposited, more than that deposited in Employee Contribution), 1.1% of Basic as Admin Exp, 0.5% EDLI to be calculated on Rs 6500/- only if the basic is more than Rs 6500/- if less than on Actuals, 0.01% Inspection Charges to be calculated on Rs 6500/- only if the basic is more than Rs 6500/- if less than on Actuals.
Please let me know if you need any further information in this regard.
Warm regards,
Pranab Chakraborty
9404384433
From India, Mumbai
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Employer contribution of PF is normally shown by the company in the CTC (cost to the company). It does not mean that they are deducting the PF contribution from the salary. The circular also stated that showing employer contribution in CTC is not wrong at all.
Some companies contribute to PF based on the total salary of basic+DA, even beyond the ceiling amount (Rs. 6500). However, some companies restrict PF contribution to the ceiling amount, depending on the company policy.
D. Gurumurthy
From India, Hyderabad
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Some companies contribute to PF based on the total salary of basic+DA, even beyond the ceiling amount (Rs. 6500). However, some companies restrict PF contribution to the ceiling amount, depending on the company policy.
D. Gurumurthy
From India, Hyderabad
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PF not applicable on CTC 18.3.2014.pdf