As per new labour laws from July 1,2022, what is the procedure to calculate PF ? How does PF increase and take-home reduce for an employee ? Pl respond urgently.
From India, Jubilee Hills
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5From India, Jubilee Hills
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There is no new calculation effective from July 2022. All these are unnecessary press reports. Even earlier PF was (to be) calculated on the gross salary earned. The practice of calculating the PF on basic wages alone was objected by the EPFO long before, quoting the provisions in the EPF & M Act that the contribution is to be made at the rate of 12% on the Basic wages and that the basic wages mean the TOTAL Wages earned by an employee. The employer can restrict those wages to Rs 15000. That means if your salary is Rs 50000, only Rs 15000 will qualify for PF. Obviously, 12% of 15000 is Rs 1800, and that will be deducted from the salary.
When the new Labour Code is enforced (when...???) the definition of PF qualifying salary has been redefined and accordingly the salary on which PF is to be deducted (and contributed) is equal to basic wages (as designed by the employer) plus 50% of the allowances which exceed that Basic wages. Total confusion...! Whatever be the basic + allowances or basic + 50% of the allowances in excess of the basic, the employer can restrict the PF to 12% of Rs 15000. Now we reached the old pattern! The 12% of 15000 is Rs 1800, and the deduction is Rs 1800 from Rs 50000. Where is it going to impact your take-home salary?
In respect of an employee whose salary is less than Rs 15000, the actual salary is the base for PF contribution. I am afraid if any person is working with a salary of less than Rs 15000 when most of the states in India have minimum wages more than that!
From India, Kannur
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When the new Labour Code is enforced (when...???) the definition of PF qualifying salary has been redefined and accordingly the salary on which PF is to be deducted (and contributed) is equal to basic wages (as designed by the employer) plus 50% of the allowances which exceed that Basic wages. Total confusion...! Whatever be the basic + allowances or basic + 50% of the allowances in excess of the basic, the employer can restrict the PF to 12% of Rs 15000. Now we reached the old pattern! The 12% of 15000 is Rs 1800, and the deduction is Rs 1800 from Rs 50000. Where is it going to impact your take-home salary?
In respect of an employee whose salary is less than Rs 15000, the actual salary is the base for PF contribution. I am afraid if any person is working with a salary of less than Rs 15000 when most of the states in India have minimum wages more than that!
From India, Kannur
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Salary Sheet & PF PT Calculation & Challan Nov 2010.xls