Non Contributory Period (NCP) in PF means the number of days for which the employee is absent to the job in a particular month. Simply NCP means the number of Loss of Pay days (LOPs) in a month.
Whenever an employee becomes absent from his/her job and doesn’t have any leaves to use then that absent day will be marked as an LOP and no salary will be paid for that day.
So the salary (basic) of the employee decreases then the PF contribution will also decrease.
What is the Use of Showing Non Contributory Period (NCP) Days in PF
Whenever the employer is filing PF monthly returns then they have to mention the NCP days of each employee in the EPF ECR file.
So that the EPFO will know for how many days the employer is paying PF contribution for that particular employee, it brings transparency in filing the EPF returns.
If an employee doesn’t have any LOPs then NCP days will be mentioned as “Zero” in EPF ECR format.
Here is an example of NCP days in PF ECR excel file.
How Do You Calculate NCP Days
If an employee is absent and doesn’t have any leaves to apply then the employer will mark that day as LOP.
- In Apr 2021, an employee is absent for 2 days, and he doesn’t have any leaves to apply.
- So the employer marked those 2 absent days as LOPs.
- So the Non Contributory Period (NCP) for that employee in the month of April 2021 is 2 days.
- And for these 2 days salary will be deducted from his salary, so PF contribution of employee and employer will also reduce.
(Note: If an employee has leaves then those leave days will not be considered as NCP, because he will get a salary for those days.)
Actually there is no need to calculate NCPs separately, the no of LOPs of employees will be present in monthly salary statements.
Can NCP days be Zero
Yes, if an employee doesn’t have an absence in a particular month then the NCP days will be taken as Zero in PF ECR excel file.
What is claim rejected due “NCP days for the period 15/XX/20X to 05/XX/20XX not received”
There are 2 possible reasons for getting this message after PF claim rejection. They are
- When you have many LOPs and your employer doesn’t update those LOPs as NCP days while filing PF returns.
- The second reason is when EPF members try to apply for full pension withdrawal after 10 years of their service. After 10 years EPF members will become eligible to get a monthly pension after 58 yrs of their age.
How to correct wrong NCP days in PF
If an employer files EPF returns with wrong NCP days, then they have to write a request letter to their EPF regional office to correct NCP days.
What is “Error NCP days invalid value found on line Numbers”
NCP days should be taken as greater than or equal to Zero in PF ECR file format. Any negative values and values other than numbers will lead to the above error.