The PF department had released a series of changes in August 2014. The first was on UAN and employee KYC and the second on wage ceiling revision for EPF coverage. Greytip has swiftly taken care of both the changes in greytHR in just one calendar month.
The wage ceiling revision for PF and EPS payments directly impacts your current Payroll processing of September 2014 and future. The changes and their solution in greytHR are as follows:
- PF Salary’s basic limit is raised from Rs. 6,500 to Rs. 15,000 per month.Toward this, we have modified the component PF Basic to 15,000.
- If you were limiting the PF deduction up to the statutory limit, this change will now cause a higher deduction in the PF component. Consequently, your contribution as an employer to PF will also go up. These changes are reflected in the EPS and EPF components.
- If you were not limiting the PF to the statutory limit and were deducting the PF on the entire PF Basic then there will be no change.
- Arrears inclusion in PF Basic will be handled as was being done earlier.
- EPS calculation at the rate of 8.33% is now on this PF Salary. This is applicable to those who joined your organization before 1st September, 2014. Toward this:
- The rate of 8.33% is now on the higher PF limit of 15,000, resulting in an allocation of 1250 for EPS.
- In case the PF Basic is less than the limit of 15,000 then EPS is calculated on the PF Basic and not on 15,000.
- Employees who joined on or after 1st September, 2014 and whose EPF account is still active (i.e. they were paying PF in their earlier organization if any) need to be marked for EPS calculation. Otherwise only employees with PF Salary less than Rs. 15,000 per month will be considered for EPS. Toward this:
- You can update this mark (flag) for EPS calculation in the Employee > Information > Bank/PF/ESI Accounts menu.
Mark your calendar for the training webinar on this topic on 23rd September, 2014. Register now to get live answers to all your queries.