In PF Monthly Electronic Return (PF ECR), why is the PF wage amount not matching the PF amount PF is calculated on?

In the PF monthly Electronic Return, we need a PF wage amount. This PF wage represents the amount on which PF amount is calculated on. Now because PF amount is rounded off to the nearest number, there may be different PF wages for the same PF amount. To avoid this and have consitancy the PF wage amount in the report is not the actual amount the PF is calculated on but is based on the PF amount. It is the reverse calculation on PF amount to get the PF wage.

Example:

Consider an employee for whom the PF amount is calculated as 12% on Basic and the Basic for the employee is 12953.

Now the PF amount will be:

12953*12%= 1554.36 

Now since PF amount is rounded off to the nearest whole number the PF amount is 1554.

Now in the report, the PF Wage value is not taken as the actual amount PF is calculated on but is reverse calculated on the PF amount. So the PF wage is:

1554*(100/12)= 12950.

12950 is the PF wage that we can see in the report.

The same is true for all PF values.

Hope you now know why the PF wage in the PF Monthly Electronic Return may not match the amount on which PF is calculated on. Need more help? You can refer to the other articles available or Contact us!