As we all know that every employee who is getting a salary of 15000 Rs or less than 15000 Rs will come under EPF scheme. Earlier this limit was 6500 Rs but after some amendments this limit was increased to 15000 Rs. So whenever there is less than salary of 15000 Rs then PF calculation is not a problem, but there are so many queries regarding how to calculate PF of basic salary more than 15000 Rs.
Cases When We Need To Calculate PF Of Basic Salary More Than 15000
In some cases employers will so willingness to pay PF contributions to employees whose basic + DA is more than 15000 Rs. In those cases we need to do these kind of calculation. But before going to learn how to calculate PF of basic salary more than 1500 we have to learn some basic concepts of PF contribution percentages.
What are the PF contribution percentages:
Most of the EPF contributors are not aware that PF contribution is divided in to two parts, they are provident fund and pension contributions. As per provident fund act 1952, 12% of employee basic salary will goes to provident fund account of employee. Now employer also need to pay same 12% contribution to EPFO but in this 12%, 3.67% will go to employee provident fund contribution and remaining 8.33% will go to pension fund of employee.
Employer also needs to pay 0.65% of admin charges ( earlier it was 0.85%) , 0.5% Employee Deposit Linked Insurance Charges ( EDLI ). So total contribution of employer is 3.67% + 8.33% + 0.65% + 0.5% = 13.15 %
PF Contribution Percentages
|Employee||12% Provident Fund Contribution|
|Employer||3.67% Provident Fund Contribution
8.33% Pension Contribution
0.65% Admin Charges
0.5% EDLI Charges
PF Calculation On Basic Salary Of Employee Is Less Than 15000 Rs
Always PF will be calculated on basic salary + Dearness Allowances (DA) of employees. Here we will taken an example of an employee whose basic salary is 8000 Rs, then his and employer contributions will be followed as :
|Employee PF Contribution 12%||Employer Contributions|
|12% of employee basic
salary = 960 Rs
|PF Contribution 3.67 % = 294 Rs
Pension Contribution 8.33% = 666 Rs
Admin Charges 0.65 % = 52 Rs
EDLI Charges 0.5% = 40 Rs
How To Calculate PF Of Basic Salary More Than 15000
Now we are going to learn how to calculate PF of basic salary more than 15000 Rs. But before calculating PF on basic salary and DA, we should remember that pension wage must be always 15000 Rs or less than 15000 Rs only. Similarly EDLI wages of employee also must be taken as 15000 of less than 15000. But provident fund calculation will be done on actual basic salary.
Example : If an employee’s basic salary is 18000 Rs, then we have to calculate pension and EDLI on only 15000 Rs.
Employee PF Contribution 12 % On 18000 = 2160
Employer Pension Contribution 8.33% On 18000 = 1250
Employer PF contribution = 2160-1250 = 910 ( Here we don’t take 3.67% )
Note : When you use ECR excel it will be calculate automatically. We just need to enter basic salary of employee.