Determining pf wages
shrivatsa
(Querist) 10 October 2012
This query is : Open
Hi,
I need clarifications regarding PF wages in case of an employee drawing basic salary more than Rs. 6500/- pm.
I have given two type of calculating PF Wages ina particular month.
In Method 1 – PF wages is calculated pro rata basis on actual basic, but, restricted to Rs. 6500/- pm, maximum.
But, in Method 2, PF wages calculated keeping wage ceiling i.e., Rs. 6500/- as fixed PF wages. Earned PF wages in that particular month will get reduced less than Rs. 6500/- in case employee is absent for even a single day.
In my opinion, PF wage must be the actual wage earned but, restricted to a maximum of Rs. 6500/- pm. In section 29(1) of Chapter V of EPF Scheme, 1952, its mentioned that PF contributions will be paid on wages ‘PAYABLE’ to an employee. In section 29(3) of Chapter V of EPF Scheme, 1952, its mentioned that PF contribution calculations must be done on PF wages actually drawn in that particular month.
In the above context, Method 1 is the correct way of calculating PF contribution in case of an employee drawing Basic wages more than Rs. 6500/- pm.
Pl provide your point of view in this regard.
