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Pf and esi question

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Shivani

Learner

1167 Points Posted on 12 June 2013

Sorry i didnt knew where to post this question, so i m posting it under the Income Tax section of the forum.

Question

1. Employee and employer share of PF and ESI is calculated on salary payable to the employee on the bais of his attendance during the month? Am i right?

2. If an employee is absent for whole of the month, then does the employer still contributes towards the PF and ESI?

3. If an employee is absent for whole of the month, then employee share of PF and ESI shall be zero? Am i right?

4. If the Basic salary of employee is 10000 and DA forming part of retirement benefits is Rs. 3000. Employee has opted for PF. Now the employer can limit his contribution to Rs. 6500 i.e. 12% of 6500 = Rs. 780? Am i right?

Employee contribution can be 12% of Rs. 13000 i.e. 1560. Am i right?

Now can an employee raise his contribution to PF in percentage terms? I mean can he say to employer that kindly deduct my PF at 20% of my basic + DA?

Please guide

Shivani

shivaniadream @ gmail.com

Replies (1)

CMA Ramesh Krishnan

Cost & Management Accountant

60967 Points Posted on 12 June 2013

1.Yes. PF & ESI payable on the earned wages of the employee

2. Yes.if the employee absent whole month then no earned salary, there is no question of contribution of employer contribution

3. Employee contribution also not required since the earnings are zero

4. No. Employer and employee need to contribute on Rs. 13000 only. but Employer has option that Employer pension fund(EPS) can be limit of Rs.6500/- balance and balance amount can go Provident fund account

Regards

CMA Ramsh Krishnan