Dear Seniors,
I am from Hyderabad and working as a manager in a pharmaceutical company. My Salary Structure is as follows: Basic - 12260, HRA - 7969, Bonus - 1021, TA - 800, Special Allowance - 12179, CCA - 0, Education Allowance - 0, Total - 35029.
My Deductions: PF - 1471 (12% of Basic), PT - 200.
In view of a notice received from an Enforcement Officer regarding the special allowance not being included for PF calculations, kindly clarify the following points, please:
1. Is the calculation of PF, i.e., 1471, which is 12% of Basic (12260), correct?
2. I understand that HRA, Bonus, and TA in the above breakup need not be included for PF calculations. Please correct me if I am wrong.
3. Should we include the special allowance, i.e., Rs. 12179, for the calculation of PF along with Basic?
4. With the above salary structure, are we going against the law? If yes, kindly point out where we are making mistakes in calculations.
Thank you.
From India, Hyderabad
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1I am from Hyderabad and working as a manager in a pharmaceutical company. My Salary Structure is as follows: Basic - 12260, HRA - 7969, Bonus - 1021, TA - 800, Special Allowance - 12179, CCA - 0, Education Allowance - 0, Total - 35029.
My Deductions: PF - 1471 (12% of Basic), PT - 200.
In view of a notice received from an Enforcement Officer regarding the special allowance not being included for PF calculations, kindly clarify the following points, please:
1. Is the calculation of PF, i.e., 1471, which is 12% of Basic (12260), correct?
2. I understand that HRA, Bonus, and TA in the above breakup need not be included for PF calculations. Please correct me if I am wrong.
3. Should we include the special allowance, i.e., Rs. 12179, for the calculation of PF along with Basic?
4. With the above salary structure, are we going against the law? If yes, kindly point out where we are making mistakes in calculations.
Thank you.
From India, Hyderabad
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1. Is the calculation of PF, i.e., 1471 (which is 12% on Basic - 12260), correct? Yes.
2. I understand that HRA, Bonus, and TA in the above breakup need not be included for PF calculations. Please correct me if I am wrong. Except Basic and DA, no other allowances are required to be deducted for EPF contributions. There are several case laws available to substantiate this point. The same can be shown to EPF authorities for reference.
3. Should we include the special allowance, i.e., Rs. 12179, for the calculation of PF along with Basic? Not required unless the employee wants it to be included as a voluntary contribution.
4. With the above salary structure, are we going against the law? If yes, kindly point out where we are making mistakes in calculations. There is nothing against the law in the above structure as long as your employer is also paying their contribution of 13.65% of your basic, excluding your 12%.
From India, Chennai
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2. I understand that HRA, Bonus, and TA in the above breakup need not be included for PF calculations. Please correct me if I am wrong. Except Basic and DA, no other allowances are required to be deducted for EPF contributions. There are several case laws available to substantiate this point. The same can be shown to EPF authorities for reference.
3. Should we include the special allowance, i.e., Rs. 12179, for the calculation of PF along with Basic? Not required unless the employee wants it to be included as a voluntary contribution.
4. With the above salary structure, are we going against the law? If yes, kindly point out where we are making mistakes in calculations. There is nothing against the law in the above structure as long as your employer is also paying their contribution of 13.65% of your basic, excluding your 12%.
From India, Chennai
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Thank you, Mr. Stephen. That was indeed a clear reply. I confirm to you that ours is CTC, and both contributions are being paid as per the laws.
Secondly, it will be helpful for us if you can refer to the case laws you were mentioning or at least show us the way to check on the internet or get them in the form of books. It will be of great help.
Thirdly, in the salary structure given earlier by me, instead of "Special Allowance," "Flexi Benefit Pay" was used, but the amount remains the same. Will this update change your response? Please do let us know.
Thanking you once again for the help.
From India, Hyderabad
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Secondly, it will be helpful for us if you can refer to the case laws you were mentioning or at least show us the way to check on the internet or get them in the form of books. It will be of great help.
Thirdly, in the salary structure given earlier by me, instead of "Special Allowance," "Flexi Benefit Pay" was used, but the amount remains the same. Will this update change your response? Please do let us know.
Thanking you once again for the help.
From India, Hyderabad
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Salary Sheet & PF PT Calculation & Challan Nov 2010.xls