Quick Answer: How Is PF Salary Calculated?

Is PF compulsory?

Under the EPF&MP Act, 1952, an EPF account is mandatory for all employees with a basic salary up to `15,000 per month in firms employing more than 20 workers.

While 12% of the basic salary is deducted for PF from the worker, the employer makes a matching contribution..

How PF is divided?

Employer’s contribution is 12% of Basic salary + DA, the contribution is divided into 2 parts; 3.67% for EPF and 8.33% for EPS.

What is the EPF interest rate for 2020 21?

New EPF interest rate was announced by the Union Labour Minister Santosh Gangwar on 3rd March 2020. The interest rate for the scheme has been revised and lowered by 0.15% for the current financial year. For 2019-20, the interest rate is 8.50% which is reduced from the earlier 8.65 per cent.

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.

How much loan can I get on PF?

Quantum of COVID-19 Emergency Advance: You can avail the non-refundable advance up to the sum of 3 months’ wages and dearness allowance or up to 75% of the EPF account balance, whichever is less.

What is gratuity salary?

Gratuity is the monetary amount which is payable to the employee of an organisation under the Payment of Gratuity Act 1972. This is mainly paid to the employee as a token of appreciation for his/her services towards the company.

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.

How is PF amount calculated?

Interest on the Employees’ Provident Fund (EPF) is calculated on the contributions made by the employee as well as the employer. Contributions made by the employee and the employer equals 12% or 10% (includes EPS and EDLI) of his/her basic pay plus dearness allowance (DA).

How is PF calculated on salary 2019?

– If you are a man, you must contribute 10% or 12% of your basic salary. – In case you are a new woman employee, it is 8% of your basic salary for the first 3 years. Thereafter, it becomes 10% or 12% of your basic salary. – Your employer has to contribute an amount equal to 10% or 12% of your basic salary towards EPF.

How much PF amount can be withdrawn while working?

As per the EPFO notification, an employee will be permitted to make PF withdrawal of up to 75 per cent of the amount standing to the member’s credit in the EPF account or up to the amount of basic wages and dearness allowance for 3 months, whichever is less.

Is PF a part of CTC?

Most employers contribute 12% (called PF) of basic salary every month to employee’s Provident fund account, shown in CTC. An employee also contributes 12% (called VPF). … Employer PF is part of CTC not shown on Salary Slip.

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.

What percentage of salary is PF?

12 percentAn employer has to match the employee’s contribution of 12 percent of employees basic pay, however, the employer is not obliged to match employee’s higher contribution towards VPF. However, the entire amount of employer’s contribution does not go into the employees PF account.

How is PF calculated from CTC?

EPFO rules call for deducting 12.5% of the employee’s basic pay as PF contribution and an equal amount has to be chipped in by the employer. … It is a part of CTC as the total expenditure incurred on the employee each month,” said a HR manager in a private civil construction firm.

How many times PF loan can be taken?

You can use up to 50 % of the amount that is there in your EPF account and you can enjoy this advantage for a maximum of three times.

What is CTC and PF?

CTC is cost to company- How much employer is spending for an employee per annum. It includes Net Salary+Employee PF+Employer PF +professional tax+ other taxes+variables(yearly bonus+ performance bonus+ other incentives) Gross salary – Net Salary+ PF+professional tax+other taxes…