Dear experts,
Any advice on EPF here?
XYZ company is contributing EPF on actual basic wages higher than the wage limit of INR 15000/- as a universal policy for all employees. However, there are scenarios where PF basic wages are reduced below INR 15000/- due to loss of pay, unpaid days, employees leaving early due to settlements, or new joiners joining in later stages of the month.
An auditor observed this and mentioned that if PF wages are reduced below INR 15000/- due to the mentioned scenarios, the contribution should include all allowances (excluding HRA or variable pays) and continue contributions up to INR 1800/-. Is this observation in line with the PF Act? Can we challenge these observations if compliance risks arise?
Thank you in advance for sharing your points of view.
From India, Bangalore
Acknowledge(0)
Amend(0)
2Any advice on EPF here?
XYZ company is contributing EPF on actual basic wages higher than the wage limit of INR 15000/- as a universal policy for all employees. However, there are scenarios where PF basic wages are reduced below INR 15000/- due to loss of pay, unpaid days, employees leaving early due to settlements, or new joiners joining in later stages of the month.
An auditor observed this and mentioned that if PF wages are reduced below INR 15000/- due to the mentioned scenarios, the contribution should include all allowances (excluding HRA or variable pays) and continue contributions up to INR 1800/-. Is this observation in line with the PF Act? Can we challenge these observations if compliance risks arise?
Thank you in advance for sharing your points of view.
From India, Bangalore
Acknowledge(0)Amend(0)
EPF is contributed on EPF wages, which means Basic, DA, and other allowances as well. If the total EPF wages exceed Rs. 15,000, there is no constraint. However, if the amount is reduced, it is advisable to consider including DA and other allowances in the calculation as well.
From India, Bangalore
Acknowledge(0)Amend(0)
From India, Bangalore
Acknowledge(0)Amend(0)
Auditor is right. But there will be cases when it will be difficult. Say Basic is 20,000/- per month and HRA is 10,000/- per month, and monthly gross 30,000/- per month. Due to half-month LOP, the Basic comes down to 10,000/- for the month, HRA 5,000/- for the month, and monthly gross 15,000/- per month.
In the above case, PF will be deducted on 10,000/- basic, which is less than 15,000/- per month statutory limit.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531 skb@usdhrs.in
From India, New Delhi
Acknowledge(0)Amend(0)
In the above case, PF will be deducted on 10,000/- basic, which is less than 15,000/- per month statutory limit.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531 skb@usdhrs.in
From India, New Delhi
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Compliance for EPF members going abroad 20.1.2015.pdf