07 February 2014
Dear sir i have a doubt in PF Calculation. What is minimum salary (Basic+Conv+Food+Education allowances) eligible for PF calculation in this F.Y. 2013-14. Another one is from April 2014 onwards is any changes have in minimum salary. Let me know sir.
10 August 2024
### Provident Fund (PF) Calculation and Minimum Salary Eligibility
#### **1. PF Calculation for FY 2013-14**
For the Financial Year 2013-14, the Employees' Provident Fund (EPF) Act primarily considers the following for PF contribution:
- **PF Contribution Calculation Basis:** - **Employee Contribution:** 12% of Basic Salary + Dearness Allowance (DA) - **Employer Contribution:** 12% of Basic Salary + DA (which includes 3.67% to Provident Fund Account No. 1 and 8.33% to Employees' Pension Scheme Account No. 10)
- **Minimum Salary Considered for PF:** - The PF contributions were calculated on the Basic Salary + DA up to a maximum limit of ₹6,500 per month for contributions till 2013-14. This means that if an employee’s Basic + DA was more than ₹6,500, PF contributions were only calculated on ₹6,500.
#### **2. Changes Post-April 2014**
From April 1, 2014, the Employee Provident Fund and Miscellaneous Provisions Act, 1952, had the following updates regarding PF contributions:
- **Revised Salary Cap for PF Contribution:** - The wage ceiling for mandatory PF contributions was revised to ₹15,000 per month. This means if the Basic + DA exceeds ₹15,000 per month, PF contributions are applicable only up to ₹15,000.
- **PF Calculation:** - For employees earning up to ₹15,000 per month in Basic + DA, PF is calculated on the entire amount. - For employees earning more than ₹15,000 per month, PF is calculated on ₹15,000.
### **Summary of Key Points**
- **For FY 2013-14:** PF contributions were calculated on a maximum of ₹6,500 for Basic + DA. - **From April 1, 2014, onwards:** - PF contributions are applicable up to ₹15,000 per month for Basic + DA. - Contributions above ₹15,000 are not mandatory but can be voluntarily contributed by both employer and employee.
### **Important Notes**
- **Allowances:** For PF calculation, only Basic Salary and DA are considered. Allowances such as Conveyance, Food, and Education are generally not included. - **Compliance:** Ensure compliance with the latest regulations and periodically check for any updates or notifications from the Employees' Provident Fund Organisation (EPFO).
If you have specific scenarios or require further clarification, please let me know!
CAclubindia
