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What is the contribution or deduction percentage for PF?

According to the Employees Provident Fund (PF) and Miscellaneous Provisions Act, 1952, an employee needs to contribute 12% of PF Gross as PF contribution.
The employer also needs to contribute 12% of the PF Gross as a contribution to the employee's account.
The rate is generally published by the government. In case there is a change in the percentage then we can make the modifications in the PF and Employer PF formula.

What is PF Basic or PF Gross?

This is the amount on which the PF contribution or deduction is calculated. Generally in 95% of the companies this is Basic + Basic Arrears + DA + DA Arrears. However, there are always exceptions and some companies want it to be a little different. In that case, we can change the PF Basic formula to cater to the client's requirements.

Does every employee contribute to PF?

According to the PF rules (as of 2004), all employees who draw a PF Basic of less than Rs. 15000 have to contribute to PF. This is mandatory. For employees having PF Basic more than Rs. 15000, the deduction/contribution will be on 15000. However in most companies, PF is applicable to all employees. There are exceptions (people who do not contribute) but these are few.

What is PF Year?

PF accounting is done from March to February of every year. This period is called as PF Year. This is applicable only to PF and does not have any effect in any other modules.

What is VPF or Voluntary PF or Voluntary Provident Fund?

As the name suggests, Voluntary PF is PF contribution by an employee, over and above the mandatory deduction (i.e. over and above the percentage specified by the government). Generally, an employee indicates to the company or payroll people a willingness to contribute to VPF. In this case, the VPF deduction is done. This deduction is purely from the employee's perspective and the employer has no connection to this.

What are the various reports associated with PF?

  1. PF Monthly report: This is a report that needs to be generated every month and it contains the details of Employee PF, Employer PF, VPF, and PF Basic for the employee. Based the numbers appearing in this report, the company needs to make payments to the government every month.
  2. PF - Form 5: This is a monthly report giving a list of all employees who have joined the company in the current month. Based on an option setting, this report can also indicate all the employees whose payroll has been processed for the first time in this month.
  3. PF - Form 10: This is a monthly report giving a list of all employees who have left/resigned the company in the current month. Based on an option setting, this report can also indicate all the employees whose PF has been settled in this month.
  4. PF - Form 12A: This is a monthly report giving a summary of the number of employees currently covered under PF, total contribution for the month, and other details.
  5. PF - Form 3A: This is a monthly report giving a summary of all the PF deductions (employee and employer) done for the employee in a given PF Year.
  6. PF - Form 6A: This is a monthly report giving a summary of Form 3A per employee. This report gives the total deductions done for each employee in a given PF Year.

What are the various options for PF Form 10?

Form 10 can be generated based on either Leaving Date or Settlement Date. This can be set in the General Options. The option name is USE_SETTLEDATE_IN_FORM10. If you set this option to YES then the Form 10 report will list all employees who are settled in the given date range. Otherwise, it will pick up all employees who have resigned in the given date range.

An employee has PF deduction but is not appearing in the PF report. What could be the issue?

PF report considers a field called PF Eligibility. An employee name will display in the PF report only if marked as PF Eligible in corresponding employee information. Verify if PF Eligible is selected in the Employee Information page of your application.

What is PF Admin charges and PF Admin Charges percentage?

As the government is maintaining the PF accounts of all employees, it charges companies a certain sum for this. This is called as PF Admin charges.
PF Admin charges is generally a percentage of the total PF Basic. This is called as PF Admin percentage. 

PF Admin charge, is generally a percentage of the total PF Basic. This is known as PF Admin percentage.

Table1: Summrized Table for PF rates


What is the link between PF and Income Tax?

As per Indian Tax laws, any contribution done by the employee towards PF can be considered for Section 88 rebate.
In Folklore, any deduction done for PF and VPF is automatically considered for Section 88 rebate in the Income Tax module.
For more details on Income Tax and rebates, please refer to Income Tax Concepts.

What if Family Pension Fund or FPF or Employee Pension Scheme or EPS?

The contribution made by an employer towards PF is split into contribution towards PF and contribution to another scheme called Pension Scheme.

I have an error while exporting Form3A - (Form 3A) to EDI format. What do I verify?

Verify if the ODBC driver for VFP is installed on the PC, where the export is happening. This is needed as the EDI file is generated in DBF format.

How to do PF process in greytHR for the existing member of PF - UAN - Joining your company?

  1. Login to greytHR → go to Actions tab → Select the ‘Add employee link’ → Enroll an employee into greytHR by filling in all his necessary details, under the PF section - enable ‘Eligible for PF’ and enter the UAN Number (Select ‘Regular PF Contribution (Max 1800)’  (or) ‘Excess PF Contribution (Above 1800)’).
  2. Once you click ‘finish’ after enrolling an employee, on the same screen under related action select ‘Add Salary’.
  3. Enter only the Annual CTC of the employee (System will automatically do the component wise salary breakup).
  4. Payroll → Process Payroll → Quick process (Your payroll will be processed here).
  5. Go to Reports → Search for ECR → Select ‘PF - ECR Format’ Report from the search result → then, ‘Regular’ as a type → Click generate ECR file.
  6. Then a text file is downloaded on your system, PF admin user should login to PF Unified Portal and upload the generated ECR text file from greytHR.

Once this is done, the employee will now be tagged as being part of your organization and remittances done every month will be credited to his account.

How to do PF - Process for a new entrant to your organisation who has never been previously a contributing member of PF using greytHR:

  1. Login to greytHR → go to Actions tab → Select the ‘Add employee link’ → Enroll an employee into greytHR by filling in all his necessary details, under the PF section - enable ‘Eligible for PF’ (Select ‘Regular PF Contribution (Max 1800)’  (or) ‘Excess PF Contribution (Above 1800)’)
  2. Once you click ‘finish’ after enrolling an employee, on the same screen under related action select ‘Add Salary’
  3. Enter only the Annual CTC of the employee (System will automatically do the component wise salary breakup)
  4. PF Admin user needs to login to → Unified PF Portal with relevant KYC for the new member → Upload them and generate UAN
  5. Enter the generated UAN number and the PF number in greytHR

Where to enter the UAN number in greytHR?

  1. Under Employee → Information → PF Details add all the details**
  2. Payroll → Process Payroll → Quick process (Your payroll will be processed here)
  3. Go to Reports → Search for ECR → Select ‘PF - ECR Format’ Report from the search result → then, ‘New Joinees’ as a type → Click generate ECR file                                                     
  4. Then a text file is downloaded on your system, PF admin user should login to PF Unified Portal and upload the generated ECR text file from greytHR 

How to do PF process for Resigned employees using greytHR

  1. Under Employee tab → Information → Separation → Select the employee and furnish the resignation details (tentative relieving date etc.,)
  2. Once employee has left the organisation (after serving his notice period) do the following:
    1. Payroll → Payroll Inputs → Final settlement → Select the employee → Finish the settlement process

  3. Payroll → Process Payroll → Quick process (Your payroll will be processed here)
  4. Go to Reports → Search for ECR → Select ‘PF - ECR Format’ Report from the search result → then, ‘Exit Employees’ as a type → Click generate ECR file                                                   

Then a text file is downloaded on your system, PF admin user should login to PF Unified Portal and upload the generated ECR text file from greytHR

How to do PF process for my existing employees using greytHR on a monthly basis

  1. Payroll → Process Payroll → Quick process (Your payroll will be processed here)
  2. Go to Reports → Search for ECR → Select ‘PF - ECR Format’ Report from the search result → then, Select ‘Regular’ as a type → Click generate ECR file              
  3. Then a text file is downloaded on your system, PF admin user should login to PF Unified Portal and upload the generated ECR text file from greytHR

http://www.slideshare.net/ShwetaAlok37/know-epf-the-eway?v=default&b=&from_search=48

http://www.slideshare.net/fullscreen/GreytipOnline/employee-provident-fund/2

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