Suppose one employee's Gross salary is Rs. 30,000/- out of which Basic salary is Rs. 20,000/-. His EPF wages are Rs. 20,000. Now, is this employee eligible for EPS?
1) If yes, then on how much salary will EPS be calculated?
2) If no, then will the entire contribution of 24% (from the employee and employer) go to the provident fund account of the employee?
From India, Calcutta
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111) If yes, then on how much salary will EPS be calculated?
2) If no, then will the entire contribution of 24% (from the employee and employer) go to the provident fund account of the employee?
From India, Calcutta
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EPF is a labor welfare scheme, and if the establishment is covered under EPFO, then they have to offer the EPF membership. The employer has to hand over the Form 11 (revised) to the employee and ask him to fill the same and annex the KYC documents. If the employee has an active EPF account or UAN from past employment anytime, then he has no option to decline membership but to join the EPFO.
Now regarding EPS, if the member has contributed anytime in his past service to EPS, then his EPS should be deducted on ₹15,000 @ 8.33%, i.e., ₹1,250, and the balance of ₹2,400 (12% of ₹20,000), i.e., ₹1,150, should go to a/c 1, i.e., EPF. There is no bar to deposit the EPS for a new employee above ₹15,000 even. However, he has to meet the requirement of 9+ years for pension eligibility and not withdraw the EPS account within 10 years.
But if the employee has a vision to withdraw the EPS below 10 years then (for new employees only, who don't have any UAN or EPF membership in the past), the employer has to make ECR as EPS salary "0," and the whole of ₹2,400 + ₹2,400 = ₹4,800 would go to a/c 1 of the fund. Employees who have an EPS account anytime in their past employment have to continue the EPS contribution, irrespective of the present salary structure exceeding the limit.
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Now regarding EPS, if the member has contributed anytime in his past service to EPS, then his EPS should be deducted on ₹15,000 @ 8.33%, i.e., ₹1,250, and the balance of ₹2,400 (12% of ₹20,000), i.e., ₹1,150, should go to a/c 1, i.e., EPF. There is no bar to deposit the EPS for a new employee above ₹15,000 even. However, he has to meet the requirement of 9+ years for pension eligibility and not withdraw the EPS account within 10 years.
But if the employee has a vision to withdraw the EPS below 10 years then (for new employees only, who don't have any UAN or EPF membership in the past), the employer has to make ECR as EPS salary "0," and the whole of ₹2,400 + ₹2,400 = ₹4,800 would go to a/c 1 of the fund. Employees who have an EPS account anytime in their past employment have to continue the EPS contribution, irrespective of the present salary structure exceeding the limit.
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Thank you, sir, for your reply and clearing my doubt. If a new employee (who was not an EPF member earlier) wants to withdraw his pension after 10 years, in that case, how much amount should we take into consideration for EPS calculation - Basic salary Rs. 20,000/- or statutory wage ceiling Rs. 15,000/- or can any one be taken into consideration?
From India, Calcutta
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From India, Calcutta
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Dear Abhishek,
Pension is calculated using the formula:
[ text{Pension} = frac{text{Pensionable Salary} times text{Pensionable Service}}{70} ]
Where pensionable salary is the average salary of 60 months from 30.08.2014, and earlier it was the average of 12 months. The contribution to EPS is based on the maximum of the wage ceiling fixed under the EPF Act 1952. It is observed that the RPFO authorities have been adjusting the EPS contribution based on 8.33% of the salary reckoned on the basis of the prescribed salary ceiling under the Act (Rs 6,500 up to 30.08.14 and Rs. 15,000 thereafter), even though the EPS'95 has a provision for reckoning on an actual salary basis but it has not been implemented. Therefore, even in cases where the PF contribution was made based on the actual salary, the RPFOs have been adjusting EPS contributions only based on the salary ceiling. You may verify the position in your case.
From India, Mumbai
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Pension is calculated using the formula:
[ text{Pension} = frac{text{Pensionable Salary} times text{Pensionable Service}}{70} ]
Where pensionable salary is the average salary of 60 months from 30.08.2014, and earlier it was the average of 12 months. The contribution to EPS is based on the maximum of the wage ceiling fixed under the EPF Act 1952. It is observed that the RPFO authorities have been adjusting the EPS contribution based on 8.33% of the salary reckoned on the basis of the prescribed salary ceiling under the Act (Rs 6,500 up to 30.08.14 and Rs. 15,000 thereafter), even though the EPS'95 has a provision for reckoning on an actual salary basis but it has not been implemented. Therefore, even in cases where the PF contribution was made based on the actual salary, the RPFOs have been adjusting EPS contributions only based on the salary ceiling. You may verify the position in your case.
From India, Mumbai
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Why you want to know, the website will do all the calculations.
From India, Mumbai
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From India, Mumbai
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The pensionable salary ceiling is currently 15000/-. After 10 years of service, it would only become payable after the age of 58. I hope the employee will have more years of pensionable service added to his/her EPS account for a full service of 33 years (+2 years bonus years added by EPF). The pension amounts to 50% of the present salary (based on a 60-month average), which is 7500 (50% of 15000). The pension scheme gets modified from time to time at regular intervals.
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Dear all,
I want to ask a question. My company is deducting ESIC and PF of employees for six months, but no UAN number will be generated or distributed. The HR employees are asking for their PF numbers and all, but the management has not deposited the PF amount to the PF office. I should not say anything against management. How can I handle the situation? In the company, there are 50 employees, including women, and the risk factor during working hours is 50%.
Thank you.
From India, undefined
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I want to ask a question. My company is deducting ESIC and PF of employees for six months, but no UAN number will be generated or distributed. The HR employees are asking for their PF numbers and all, but the management has not deposited the PF amount to the PF office. I should not say anything against management. How can I handle the situation? In the company, there are 50 employees, including women, and the risk factor during working hours is 50%.
Thank you.
From India, undefined
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Dear Geeta Shailesh Pandey,
Please note that as an HR professional, you are at liberty to inform your management to pay the statutory dues on time and be compliant always. Maybe you need to fight for this in a smart way with your management.
I did not understand the risk factor you are mentioning. Is it about hazardous operations or the risk factor of asking you the question on PF and ESIC?
From India, Hyderabad
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Please note that as an HR professional, you are at liberty to inform your management to pay the statutory dues on time and be compliant always. Maybe you need to fight for this in a smart way with your management.
I did not understand the risk factor you are mentioning. Is it about hazardous operations or the risk factor of asking you the question on PF and ESIC?
From India, Hyderabad
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