Is HRA included in PF calculation?

Employee Provident Fund (EPF)

To calculate the salary components under employer's contribution towards the provident fund, one has to consider the same salary components of HRA i.e; Basic Salary, Dearness Allowance(DA) and Commission (if paid as percentage of turnover).

What is included in PF calculation?

Which allowances are not included in PF calculation?

8. Then we come to clause (ii). It excludes dearness allowance, houserent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment.

Which payment is not subject to PF?

The authority conceded that Washing allowance was not liable to PF These allowances are universally necessarily and ordinarily paid to the employees across the board and hence form part of basic wage. Only where the payment is specially paid to those who avail of the opportunity is not the basic wages.

How is ESI and PF calculated with example?

Conclusion-PF and ESI calculation scenario as per Indian employee policy.PF calculation under Rs15000 Salary ,12 % deducted except HRA amount and Remaining all 12 % above Rs 15000 salary. ESI Calculation will be 3.25% for those employees whose CTC will be less than Rs 21000.

EPF (Employee Provident Fund) – Calculation, Rules 2022 | PF Calculation in Hindi | EPF

How is PF calculated on salary sheet?

1st method – In this method, the employee contribution is 12% of the basic and dearness allowance of the employee and employer contribution is 12% of basic pay = 8.33% of 15,0000. 2nd method – In this method, the employee contribution is same while employer share is 3.67% of 15,000.

How is PF calculated from CTC?

Take Home Salary = Gross Salary - Income Tax - Employee's PF Contribution(PF) - Prof. Tax. Gross Salary = Cost to Company (CTC) - Employer's PF Contribution (EPF) - Gratuity. Gratuity = (Basic salary + Dearness allowance) × 15/26 × No. of Years of Service.

Why is HRA exempt from PF?

HRA is specifically excluded as mentioned above and any other allowance for a specific purpose such as conveyance, medical, leave travel etc, would be covered by the exclusion provided, i.e., "any other similar allowance" and hence excluded. Establishments with 20 or more workers are mandatorily covered under PF.

Is HRA included in basic salary?

As per the income tax rules, the tax-exempt part of the HRA (House Rent Allowance) is the minimum of the following amounts: Actual HRA component of salary. 50% of basic salary if he resides in Delhi, Chennai, Kolkata, or Mumbai; 40% if his residence is in any other city. Actual rent paid less 10% of basic salary.

What is included in basic salary for PF?

For EPF, an employee contributes 12 per cent of the basic salary while the employer contributes 8.33 per cent towards Employees' Pension Scheme and 3.67 per cent to employees' EPF. The total of the employee and employer contribution is deposited in a fund created with the Employee Provident Fund Organization.

Is bonus a part of PF calculation?

As per Section 2(b) of EPF Act, basic wage refers to all emoluments given to an employee excluding the following: Dearness allowance, house rent allowance, overtime, bonus, commission on business sourcing or any other allowance.

Is employer contribution 13% in PF?

Contribution by an employer: The contribution made by the employer is 13% of the basic salary and PF applicable allowances of the employee. However this 13% is further subdivided into: 3.67% of contribution towards Employees' Provident Fund.

Is HRA always 50 of basic salary?

HRA deduction calculation for employees residing in a metro will be 50% of the basic salary and is 40% for residence in a non-metro city. In case of salaried individuals without a DA component or commissions in their remuneration, the HRA allowance will be 40 or 50% of their basic pay.

Is PF included in gross salary?

Gross Salary is the term used to describe all the money an employee has made working for the company in a year. It is the salary that is without any deductions like PF, Income Tax, etc. However, Gross Salary includes basic salary, house rent allowance, special allowance, and conveyance allowance, among others.

Is PF included in fixed salary?

Broadly, while CTC includes all the payments and benefits, fixed and variable, that you are entitled to, your take-home salary is what you get after all the mandatory deductions, such as Employees' Provident Fund (EPF) contribution and various taxes.

Is overtime included in PF calculation?

Provident Fund contribution will be on total salary excluding HRA, bonus, incentive, commission, overtime but will include allowances or any other payment included in any other head which is paid across the board, grade etc.

How much PF will I get on 40000 salary?

When Basic+DA is Rs 40,000: Deriving from the EPFO FAQ, the employee and employer's contribution will be Rs 4000 (10%) each instead of Rs 4800 (12%) for next three months. The employee will get the balance of Rs 800 in monthly salary in June, July and August.

What is the CTC for 30000 salary?

If your salary is 30000 Rs per month, then your salary structure will consist 50-60% basic wage, 40% HRA (for non metro cities) and 50% (for metro cities), 1600 Rs for conveyance allowance, 1250 Rs for medical allowances, and remaining amount will be included in other allowances (or) special allowances.

How much PF is deducted from 40000 salary?

Employee's contribution towards EPF (12% of Rs. 40,000): Rs. 4,800.

How do you calculate HRA?

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.

Is ESI calculated on gross salary?

Employees' State Insurance Scheme will be calculated on the gross salary (Basic and LOP dependent allowances) upto ₹21,000. If Gross is above ₹21,000 ESI will be constant.

Is PF mandatory for salary above 15000?

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.

Is it mandatory to deduct PF from salary more than 25000?

If your starting salary is above 25000 Rs then it is not mandatory to deduct PF. But if you are already a member of EPF and your monthly salary increases to above 25000 Rs then you have to continue your PF contribution, but PF will be calculated on a limit 0f 15000 salary only.