We all know that Employer\'s contribution to PF is sealed to a limit of 6500. In case, If an employee\'s salary is more than that limit, and as rule says the employer pays his contribution of Rs. 6500/- Maximum. i.e Rs. 780/- maximum. So my question is what will be employee\'s maximum contribution to PF. Employer\'s share Rs. 780 + employees share (according to his basic salary), he can pay maximum any amount on his salary.
From India, Manipal
2From India, Manipal
Dear nayakharish,
If I am not wrong, the Employees Basic salary exceeds Rs. 6,500/- he/ she will not eligible for PF, but there may be chance if an Employee voluntarily agree to contribute towards PF contribution.
Seniors suggetions will be helpful on this regards.
Regards,
Krishna Murthy
From India, Bangalore
If I am not wrong, the Employees Basic salary exceeds Rs. 6,500/- he/ she will not eligible for PF, but there may be chance if an Employee voluntarily agree to contribute towards PF contribution.
Seniors suggetions will be helpful on this regards.
Regards,
Krishna Murthy
From India, Bangalore
Hi,
Regarding PF for employee and employer there is no any particular limit for PF. Rs. 6500/- is a limit for the the pension fund.
Suppose X employee has his Basic Rs.8500/- then his/her pf calculation will be like below:
For Employee - =8500*12% will be 1020.
For Employer - =8500*12% will be 1020 but in this there are break up for employer. Employer should cut employees pf like : =6500*8.33% will 541 and remaining amount will be in the employer's PF.
So here will be the calculation for employer will be:
=8500*12% will be 1020 - 541 remaining 479 will be PF from the employer side. If you calculate 541+479 will be 1020.
Regards,
Ashwin
From India, Pune
Regarding PF for employee and employer there is no any particular limit for PF. Rs. 6500/- is a limit for the the pension fund.
Suppose X employee has his Basic Rs.8500/- then his/her pf calculation will be like below:
For Employee - =8500*12% will be 1020.
For Employer - =8500*12% will be 1020 but in this there are break up for employer. Employer should cut employees pf like : =6500*8.33% will 541 and remaining amount will be in the employer's PF.
So here will be the calculation for employer will be:
=8500*12% will be 1020 - 541 remaining 479 will be PF from the employer side. If you calculate 541+479 will be 1020.
Regards,
Ashwin
From India, Pune
Dear Ashwin, Hi
As stated by you, some of your point is right some of them is required further attention.
1. As stated employee is free to give his maximum contribution depending upon 12 % of basic e.g. Rs. 1020/- in your case of Rs. 8500/- as basic. (and if I am not wrong employee can voluntarily agree to deduct his pf @ 20% maximum of his basic salary - Senior please correct me if I am wrong)
But....
Employer is not bound to give pf on higher basic that stipulated in the act.... employer can calculate employee's pf considering his basic limited to Rs. 6500/- only if his basic is more than Rs. 6500/-. It is to the sole discretion of the company to give or calculate pf on actual basic or not(which is more than Rs. 6500/- ). Now as stated above in your case...the calculation will be as under..
For Employee - =8500*12% will be 1020.
For Employer - =6500*12% will be 780 ------------->Total = Rs. 1800/-
Now Pension will be mention in Challan = Rs. 541
EPF including employer share will be = Rs.1259/- --> Total = Rs. 1800/-
Hope I have cleared the calculations in such cases.
Regards,
Saiyed Ali Abbas
From India, Hyderabad
As stated by you, some of your point is right some of them is required further attention.
1. As stated employee is free to give his maximum contribution depending upon 12 % of basic e.g. Rs. 1020/- in your case of Rs. 8500/- as basic. (and if I am not wrong employee can voluntarily agree to deduct his pf @ 20% maximum of his basic salary - Senior please correct me if I am wrong)
But....
Employer is not bound to give pf on higher basic that stipulated in the act.... employer can calculate employee's pf considering his basic limited to Rs. 6500/- only if his basic is more than Rs. 6500/-. It is to the sole discretion of the company to give or calculate pf on actual basic or not(which is more than Rs. 6500/- ). Now as stated above in your case...the calculation will be as under..
For Employee - =8500*12% will be 1020.
For Employer - =6500*12% will be 780 ------------->Total = Rs. 1800/-
Now Pension will be mention in Challan = Rs. 541
EPF including employer share will be = Rs.1259/- --> Total = Rs. 1800/-
Hope I have cleared the calculations in such cases.
Regards,
Saiyed Ali Abbas
From India, Hyderabad
Dear Friends,
It appears that you are being confused with the PF deduction.
Firstly, Total Contribution Provident fund is 24% plus administrative charges borne by the employer . IN that 24% employer's contribution is 12% + admin charges, and employees contribution is 12%.
secondly, this 12% is calculated on the basic salary amount.
thirdly, there are mainly TWO kinds of PF contributions : 1) Limited PF and 2) Unlimited PF
Limited PF, as discussed above has the MAXIMUM limit of Rs. 6500/-. That is the Limited Companies who wants contribute the fixed amount of PF irrespective of the salaried drawn by the employees would opt for the limited PF.
Say in case if the employees basic salary is Rs. 4500/-pm the employer shall pay 12% of RS. 4500/-, in case if the employees basic pay is Rs. 7500/- then the employer pays 12% of only for 6500/- though the employees basic exceeds from it.
Unlimited PF : is where the company opts for paying 12% on what ever the basic drawn by the employees.
This whole concept of Limited and Unlimited PF is called "PF Ceiling Effect"....
There is also another situation where the Employer is exempted from PF. This does not mean that the employer need not pay the PF amount but he will not take the PF code from any of the PF authorities to pay the amount!! Need not get surprised.. It is Because, these companies will have there own PF Offices at there Companies, the reason behind this is the major turn over and transactions of the company. (Such PF authority at the company will be controlled by the government itself...)
From 12% of the PF payment 8.33% will go to the pension fund........
So there need not be any confusions as to the PF payment and the kinds pf PF/Ceiling of PF............ It is like PF is the tree and the Ceiling of PF the branch........
From India, Bangalore
It appears that you are being confused with the PF deduction.
Firstly, Total Contribution Provident fund is 24% plus administrative charges borne by the employer . IN that 24% employer's contribution is 12% + admin charges, and employees contribution is 12%.
secondly, this 12% is calculated on the basic salary amount.
thirdly, there are mainly TWO kinds of PF contributions : 1) Limited PF and 2) Unlimited PF
Limited PF, as discussed above has the MAXIMUM limit of Rs. 6500/-. That is the Limited Companies who wants contribute the fixed amount of PF irrespective of the salaried drawn by the employees would opt for the limited PF.
Say in case if the employees basic salary is Rs. 4500/-pm the employer shall pay 12% of RS. 4500/-, in case if the employees basic pay is Rs. 7500/- then the employer pays 12% of only for 6500/- though the employees basic exceeds from it.
Unlimited PF : is where the company opts for paying 12% on what ever the basic drawn by the employees.
This whole concept of Limited and Unlimited PF is called "PF Ceiling Effect"....
There is also another situation where the Employer is exempted from PF. This does not mean that the employer need not pay the PF amount but he will not take the PF code from any of the PF authorities to pay the amount!! Need not get surprised.. It is Because, these companies will have there own PF Offices at there Companies, the reason behind this is the major turn over and transactions of the company. (Such PF authority at the company will be controlled by the government itself...)
From 12% of the PF payment 8.33% will go to the pension fund........
So there need not be any confusions as to the PF payment and the kinds pf PF/Ceiling of PF............ It is like PF is the tree and the Ceiling of PF the branch........
From India, Bangalore
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