Question: Is PF Deducted From Gross Salary?

Does PF amount get double?

According to the rule, any employee can increase his monthly contribution up to 100% of basic salary.

If any employee doubles his monthly total, then the amount of his PF fund will double itself..

How is PF calculated on salary?

Calculation of PF PF contribution has to be made both by the employees and the employer. The contributions get accumulated in the provident fund in the name of the employee. The contribution of the employer is 12% of the basic wage plus dearness allowance or DA. The employee makes an equal contribution.

How is PF total calculated?

To understand methodology employed in the ET EPF Calculator, let us take the following case:Employees’ Basic Pay + DA: Rs 50000.Employee contribution towards EPF: 12%*50000 = Rs 6000.Employer contribution towards EPF = 3.67% of 50000 = 3.67%*50000 = Rs 1835…. (More items…•

How is basic salary calculated?

Basic Salary – DefinitionAnnual Basic = Monthly Basic X 12. Formula To Calculate Basic Salary. … Gross Pay = Basic + DA + HRA + Conveyance + Medical + Other. Hence, to calculate your basic from the gross pay you need to do the reverse calculation. … Basic = Gross Pay – DA – HRA – Conveyance – Medical – Other. … Basic = Gross Pay X Percentage.

Which is better CTC or gross salary?

Gross salary is the amount after the EPF and gratuity are subtracted from the CTC. Basically, the remuneration paid before deducting the income tax, professional tax, and other deductions. It is inclusive of bonuses, overtime pay, paid holiday amount, and other differentials.

Why PF is deducted twice from salary?

If the salary is mentioned as CTC, the employer PF amount only will be given in the offer letter. Employee PF amount will not be shown and it will be deducted from the salary. so it is logical only. CTC means cost to the company which is given by the company employee deductions to be not given.

What is meant by basic salary?

Basic salary is the amount paid to an employee before any extras are added or taken off, such as reductions because of salary sacrifice schemes or an increase due to overtime or a bonus. Allowances, such as internet for home-based workers or contributions to phone usage, would also be added to the basic salary.

What is the new PF rule?

Those earning a basic salary of more than Rs 15,000 a month will now contribute 10 per cent instead of the mandatory 12 per cent contribution towards the PF for the next 3 months till August 2020. … “The move by the government to reduce the 12% PF contribution to 10% will help increase the take home pay of employees.

Can I take loan from PF?

An individual having a PF account can withdraw funds from the account as loan. Partial withdrawal is possible in case the loan is towards buying/repairing a house. The employee should be in service for 5 years to be eligible to get loan against PF.

Is PF mandatory above 15000?

EPF eligibility criteria If you are drawing a salary higher than Rs. 15,000 per month, you are termed a non-eligible employee and it is not mandatory for you to become a member of the EPF, although you can still register with the consent of your employer and approval from the Assistant PF Commissioner.

Who is eligible for PF?

Employees drawing less than Rs 15,000 per month have to mandatorily become members of the EPF. However, an employee who is drawing ‘pay’ above prescribed limit (currently Rs 15,000) can become a member with permission of Assistant PF Commissioner, if he and his employer agree.

Is PF calculated on gross salary?

Salary: An employee receives Basic pay of Rs 10,000 per month. PF calculation: Since the employee’s Basic is above Rs 6,500, the stipulated ceiling for mandatory PF Gross, his PF contribution can be calculated as 12% of Basic i.e. Rs 1,200 in this case.

Is it necessary to deduct PF from salary?

Contribution towards Employee Provident Fund is optional if the basic salary is more than Rs. 6500/- per month and the employee can choose between deduction and non-deduction of provident fund.

What is total fixed pay?

Fixed pay is the fixed amount of salary that an employee gets at the end of the month whereas Variable pay is the incentive paid to the employee, monetary or non-monetary, based on their performance for the month. The ratio of fixed to the variable component, as a norm, varies based on the role the employee plays.

What is the current PF rate?

Another 3.67% is added to the EPF account of the employee. The employer also makes 0.50% of contribution towards the EDLI (Employees’ Deposit Linked Insurance) account of the employee….EPF Historical Interest Rates.YearEPF Interest Rates2019 – 20208.50%2018 – 20198.65%2017 – 20188.55%2016 – 20178.65%36 more rows•Sep 2, 2020

How do you calculate monthly salary?

Since October has 31 days, the per-day pay is calculated as Rs 30,000/31 = Rs 967.74. This is a variant of the Calendar day basis. In this method, the pay per day is calculated as the total salary for the month divided by the total number of calendar days minus Sundays.

What is the maximum limit for PF deduction?

Rs.15,000EPF Contributions The contribution of an employer towards the employee’s EPF account is 12% of the salary (basic salary+ dearness allowance+ retaining allowance). The maximum salary limit on which the employer’s contribution is calculated is capped at Rs. 15,000.

What is deducted from gross salary?

Gross Salary: Subtract gratuity and the employee provident fund (EPF) from Cost to Company (CTC), the amount that you get is your Gross Salary. It is the amount that you get before deduction of income taxes and other deduction such as bonus, overtime pay, holiday pay etc.

On which amount PF is deducted?

From the employer’s EPF contribution, 8.33 per cent goes towards the Employee Pension Scheme (EPS) and the remaining to the PF account of the employer. This EPS component is calculated on the basic pay of Rs 15,000, or actual basic pay, whichever is lesser.

How is PF pension calculated?

Earlier, EPFO was providing pension calculated on the salary of the employee with a maximum cap at Rs. 15,000. Now that the cap of Rs. 15,000 has been removed, the EPS contributions will be calculated based at 8.33% of the actual salary of the employee.

How is ESI calculated on salary?

How To Calculate ESI?If the Gross Salary of an employee is INR 15,000,The Employee’s share of contribution would be: 0.75/100 * 15,000 = INR 112.5.And, the Employer’s share of contribution would be: 3.25/100 * 15,000 = 487.5.