How to calculate Provident fund ?

Posted on 25th Jul 2018 | 1197 views
  1. Home
  2. HR Corner
  3. How to calculate Provident fund ?

5 avg. rating (100% score) - 1 votes

Provident fund calculation

The employer and employee contribute 12% towards PF. 12% of employee basic salary (plus dearness allowances, if any) into employee EPF account. It’s important to note that if employee basic pay is above Rs. 6,500 per month, employee employer can only contribute 8.33% of 6,500 (i.e. Rs. 541) to employee EPS and the balance goes into employee EPF account.

Pf calculation in India

These funds are pooled together from many employees and invested by a trust. This generates an interest of 8% - 12%, which is decided by the government and the central board of trustees. The annual interest rate is currently at 8.75%.

Pf calculation in India

There are two types of the contributions done both employee and employer towards provident fund

Are known as following

EE Amount and ER Amount

EE Amount is The Employee Contribution i.e. employee total contribution in the EPF account. The sum total of PF amount contributed towards PF monthly from employee’s salary.

ER Amount is the Employer Contribution i.e. establishment contributionin which employee work. It is the total of PF amount monthly contributed into employee EPF account by the employer.

Employees contribute 12% from their salary/ wage towards the EPS. This may differ in case of ER amount because employer contribution share is divided

Calculation of provident fund

To understand the methodology used in the EPF calculator, take the following case:

1. Basic salary of employees + DA: 50000 rupees

2. Employee's contribution to the EPF: 12% * 50000 = Rs 6000

3. Employer's contribution to the EPF = 3.67% of 50000 = 3.67% * 50000 = Rs 1835

4. Employer's contribution to the Employees Retirement Plan (ESP): 8.33% * 50000 = Rs 4165.... (I)

5. Employer's contribution to the EPF at the income threshold of 15,000 rupees: 8.33% of 15,000 = Rs 1249, 50

6. Employer contribution higher than earnings per share above threshold (I) - (II): Rs 4165 - Rs 1249, 50 = Rs 2915, 50

7. The excess of (B) is added to the employer's contribution to the EPF at (A) = 2915.50 + 1835 = Rs 4750.50

Provident fund calculation formula

Percentages are calculated on (Basic Salary + DA)

Employee contribution: (12 %)

Employer Contribution ( 12 % + 1.61 %)

1] 12 % Bifurcation

8.33 % pension fund

3.67 % Provident fund

Total 12 %

2] 1.61 % Bifurcation

Employees Deposit linked insurance :0.5%

EPF Administrative charges :1.1%

EDLIS Administrative charges : 0.01%.

Account 21: 0.5 % of (Basic+ DA) is paid by the employer towards EDLI Insurance Charges.

Account 22: 0.01 % of (Basic+ DA) is paid by the employer towards EDLI Admin Charges.

Account 2: 1.1 % % of (Basic+ DA) is paid by the employer towards EPF Charges.

Provident fund formula

PF deduction=Adding EE amount + ER amount

0 Comments on How to calculate Provident fund ?

Comment as a guest:

Recent Posts

What is HBSAT

Posted on: 10th Dec 2019

What is HBSAT? Hyderabad Business School Aptitude Test, commonly known as HBSAT is an admission entrance test for admission into two-year full-time MBA programs offered at Hyderabad Business School. HBSAT is conducted every year by Hyderabad Business School of GITAM (Gandhi Inst...

Retail sector saw 25% growth in hiring trends followed by IT/Telecom sectors: October 2019 hiring trends report

Posted on: 28th Nov 2019

Retail sector saw 25% growth in hiring trends followed by IT/Telecom sectors: October 2019 hiring trends report Wisdom jobs hiring trends report October 2019 found that there is a growth in talent demand for Consumer Durables/FMCG, Retail and Petrochemicals/Oil and Gas/ Power re...


What is BET 2020?

Posted on: 19th Nov 2019

Bocconi Entrance Test (BET) – 2020 What is BET 2020? Bocconi Entrance Test, commonly known as BET is a university level entrance for admission into International Master in Business (IMB) program offered by The University Bocconi, Mumbai. Bocconi Entrance Test is organiz...

UPAT- UPES Planning Aptitude Test 2020

Posted on: 18th Nov 2019

UPAT- UPES Planning Aptitude Test 2020 What is UPAT 2020? UPES Planning Aptitude Test 2020 an online entrance exam, commonly known as UPAT 2020 is considered as the gateway for admission to B-Plan (Bachelor of Planning) program offered by the University of Petroleum and Energ...


B-MAT/ BVP B-MAT 2020

Posted on: 14th Nov 2019

B-MAT/ BVP B-MAT 2020 What is B-MAT? BVP B-MAT or simply B-MAT is a Management Aptitude Test for admission to various PG management programs such as MBA (various streams)/PGDM conducted by BharatiVidyapeeth Deemed University, Pune. B-MAT 2020 will be organized by BharatiVidya...

AIMS Test for Management Association – ATMA 2020

Posted on: 13th Nov 2019

AIMS Test for Management Association – ATMA 2020 What is ATMA? AIMS Test for Management Association commonly known as ATMA is a national-level entrance exam and gateway for admission to many post graduate management and technical related professional courses such as ...

Alliance Management Aptitude Test – AMAT 2020

Posted on: 11th Nov 2019

Alliance Management Aptitude Test – AMAT 2020 What is AMAT 2020? Alliance Management Aptitude Test, commonly known as AMAT is a gateway for admission to MBA and other management program like PGDM offered at Alliance School of Business, Bangalore conducted by Alliance Un...

Talent demand saw growth across the sectors: Hiring trends 2019

Posted on: 07th Nov 2019

Talent demand saw growth across the sectors: Hiring trends 2019 Telecom sector ● Job share was the highest at junior level. However, demand was high for senior level candidates as well ● Demand was high for IT/Telecom and Sales/Business Development professionals at junior...

How to crack SNAP 2019?

Posted on: 06th Nov 2019

How to crack SNAP 2019? Symbiosis National Aptitude commonly known as SNAP is a university level management entrance examination for admission to the MBA and MSc (Computer Application)/MSc (System Security) programs offered at various Symbiosis Institutes located in various pa...

How to write a sales/marketing CV?

Posted on: 01st Nov 2019

How to write a sales/marketing CV? Sales and marketing are two terms that professionals often hear commonly. Though there is a difference between sales and marketing functions, these two functionswork closely together. Here we are explainingthe ways of writing a sales and market...

How to become an air hostess?

Posted on: 31st Oct 2019

How to become an air hostess? To become an air hostess of any reputed airlines, you need to have patience and serve all kinds of people. Here we are discussing about the career guide of an air hostess. Who is an air hostess? An air hostess is part of a cabin crew respons...

Employment Termination

Posted on: 28th Oct 2019

Employment Termination What is Termination from Employment? What does it mean when an employee is terminated or dismissed from the employment/job position? Well, when an employee ends his/her job is termed as “termination”. Termination can be occurred by employer ...

POPULAR POSTS

What is Appointment letter Format?

26th Jun 2018

Top 10 facts why you need a cover letter?

08th Jun 2018

Are you looking for a job in Event Management?

28th May 2018

Pharmaceutical job opportunities on rise in Gulf

23rd May 2018

MNC Vs Startup: Are you Confused to Choose between?

09th Aug 2017

Perspectives of Unemployment in India

01st Jul 2013

Have your Say!

View All

How consistently does your organization reward you for good work?

Very difficult

Reasonably consistently

Not at all consistently

Vote

Corporate Role Models

View All

Short Videos

View All

Wisdom Jobs feature_TV5 Money

Ajay & Srini share their views on the employment scenario in AP & Telangana on Sakshi TV

Press Corner

View All

All rights reserved © 2020 Wisdom IT Services India Pvt. Ltd DMCA.com Protection Status

<