PF / ESIC rate of deduction for both Employee & Employer contribution » Sensys Blog.
May 2, The Employee Provident Fund, or provident fund as it is normally In this case, the employer is not obligated to pay any contribution over and. Oct 31, EPF withdrawal is not permitted if you are still working. article to understand about EPF & EPS contribution of Employer and Employee. Sep 12, Recently Employee Provident Fund Organization (EPFO) changed few of how your EPF contribution along with employer contribution will get.
Definition of PF Gross Gross pay for the purpose of PF calculation is different from the term gross pay which is typically used in the payroll context. For the sake of clarity, we will use the term PF Gross in this post to denote the salary to be considered for PF calculation. According to the PF Act: Let us examine the above in greater detail. Here is what is stated in Section 2b of the PF Act.
It is not easy for a casual reader to figure out in the PF Act the exact definition of salary for the purpose of PF calculation. For example, while Dearness Allowance DA and cash value of food concession are excluded from the definition of Basic Wages in Section 2bgiving one an impression that DA and cash value of food concession are excluded for PF calculation. The text in the PF Act is somewhat laborious to read.
Section 2b explicitly excludes certain heads of pay such as house rent allowance, bonus, and overtime allowance, commission or any other similar allowance for the purpose of PF calculation. While organizations offer salary under heads of pay such as Conveyance, Travel Allowance, Medical Allowance, Other Allowance, and Special Allowance, such heads of pay have been ignored for the purpose of PF calculation. In other words, pay paid under the heads such as Special Allowance and Other Allowance should be included for the purpose of PF calculation unless explicitly left out by the PF Act.
On the issue of determining salary for the purpose of PF calculation, court judgments in the last couple of years favour the PF department.
You can read the PF department circulars which append the court judgements here and here.
Date of commencement of business. Copy of first invoice, if any. Proof of residences of Directors. Identification document of Directors. Particulars of the Bank Account of the Company. One blank cancelled cheque leaf. Pan number of the Company. Copy of Aadhar card though not required immediately, but start obtaining from employees. On allotment of independent code number, a contractor acquires the status of establishment may it be a Company, firm, society or sole proprietorship and becomes responsible for deposit of Employees Provident Fund contributions.
Besides that administrative charges are paid to the EPFO by such establishments.
The Law on Payment of PF Contribution by Employer on Behalf of Contract Employees
The establishment of contractor maintains records of employees, submit nomination forms, returns and complies with other formalities like maintenance of inspection book etc. While holding the principal employer liable for the default of the contractor s the provident fund authorities overlook the Form 5A under paragraph 36A of the Employees Provident Fund Scheme stipulating that every employer is require to furnish in duplicate to the Regional Commissioner with particulars of all the branches and departments, owners, occupiers, directors, partners, manager or any other person or persons who have the ultimate control over the affairs of the factory or the establishment and also to send intimation of any change of such particulars.
It is intriguing as to why a principal employer should be held liable for the default in payment of contributions or delaying the same by the establishment of the contractor.
In Pardeep Kumar vs. Presiding Officer and another, LLRthe Punjab and Haryana High Court has held that employer-employee relationship, in respect of principal employer, would not exist if the contractor, engaged in supply of man-power, is having a valid licence under the Contract Labour Regulation and Abolition Act,records of payment of wages and attendance show payments made by the contractor, EPF Employee Code number allotted to the workman is through the firm of the Contractor.
In Group 4 Securitas Guarding Ltd.
PF vs PPF: What's the difference?
Employees Provident Fund Organisation, LLRthe Madras High Court has held that when a separate code number was allotted, the employees of the contractor, by no stretch of imagination can be treated to be employees of the principal employer. After hearing the arguments on behalf of the parties Employees Provident Fund Organisation as respondentthe Court held as under: With respect to the contractors, who are registered with the Provident Fund Department, having the independent code number, they are to be treated as independent employer.
In Brakes India Ltd. Brakes DivisionSholinghurrep. Employees Provident Fund Organisation, Vellore rep.
As per the ratio laid down in the judgment of this Court, the Contractor viz. Govindaraj should be treated as an independent employer.
In Calcutta Constructions Company vs.