How PF is calculated on salary?
– 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.
What is PF of salary?
Introduction to a Provident Fund (PF) A provident fund is a government-managed, mandatory retirement savings scheme used in India, Singapore, and other developing nations. A worker gives a portion of his/her salary to the provident fund, and an employer should make a contribution on behalf of the employees.
What is employee PF and employer PF?
EPF And Your Salary: The Working If you are an employee, you pay a certain part of your salary towards the EPF scheme. This amount is often matched with an equal contribution from your employer. The combined amount is then deposited with the Employee Provident Fund Organisation (EPFO).
Is basic salary in hand salary?
Basic salary is the figure agreed upon between a company, its employee, without factoring in bonus, overtime, or any kind of extra compensation. Gross salary, on the other hand, includes overtime pay and bonuses, but does not consider taxes and other deductions. Say for instance, an employee’s gross salary is Rs.
What is the PF limit?
Without the employer’s contribution, an employee cannot contribute to his/her own EPF account. Thus, for private-sector employees,’ the maximum contribution they can make in a financial year to continue to earn tax-exempt interest will be Rs 2.5 lakh (EPF + VPF) in a financial year.
How is PF 2020 calculated?
Assuming the interest rate for 2019-2020 is 8.5%, while calculating interest applicable for each month you’ll have to divide 8.50% by 12. Therefore, 8.50%/12 = 0.7083% will be your monthly rate of interest. If contributions start from April, your total EPF contribution for the month would be ₹3,550.
How is PF calculated from CTC?
Employer Provident fund/EPF or Provident Fund You can check your balance here. Hence, 12% of the basic salary gets contributed by the employee and another 12% by the employer.