P.f act query

This query is : Open

SWETA DESAI (Querist)
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01 December 2012 Hi,

If the employees salary exceeds Rs.6500 and if he is existing employee for P.F deduction, then he can have a choose of deducting P.F on whole Basic Wages or Rs.6500.

but in case he chooses to deduct on only Rs.6500 then what will be the P.F amount deduction in following case,

Normal Basic Salary Rs.20000
Month Basic Salary (due to leave taken) Rs. 18000

So my Query is since he pays on only Rs. 6500 his P.F would be 6500*12%=780
OR
18000/20000*6500=5850*12%=702

Thanks in advance

Sweta

V K Bajaj

V K Bajaj (Expert)
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03 December 2012 As per law PF factor shall be applied on Rs. 6500/-.

However, it is the sweat wish of both (employee and employer) to contribute on total basic salaries. PF Act allows so. In many cases it is being done.

contact@vkbajaj.co.in