Reduction in Rate of Administrative Charges from 1.10% to 0.85%  of the pay:

The Government of India issues notification No. S.O. 323(E) and S.O. 324(E) both dated 02.02.2015,  on reducing the administrative charges under the Employees’ Provident Funds Scheme, 1952. The Ministry of Labour and Employment, Government of India, has issued a notification to revise the rate of administrative charges under the Employees’ Provident Funds Scheme, 1952. The changes will be effective from 1 January 2015 so administration charges payable upto 31.12.2014 will be levied at old rate.

EPFO (Employees Provident Fund Organisation) has cut the administrative fee it charges under the ambit of its social security schemes, effective from January 1st 2015. The administrative charges have been reduced to 0.85% of basic wage from 1.10% as per a Labour Ministry Notification No. S.O. 323(E) and S.O. 324(E) both dated 02.02.2015.

According to the notification, the minimum monthly administrative charges will be Rs 25 for every non-functional firm having no (PF) contributing member and Rs 200 for any other establishments. See more at: http://taxguru.in/corporate-law/govt-reduces-pf-administrative-charges.html#sthash.nU1F2T5J.dpuf


For more clarification kindly find below screen shot


6.PNG

Below is Govt notification

13.PNG

For more clarification below is link


http://www.epfindia.com/Circulars/Y2014-15/WSU_AdminChargesReduction_40648.pdf


Ur’s Mohan

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18 Comments

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      1. S Karthik

        Hello All,

        SAP is checking this with Product Manager on the legality, once Legality is confirmed, SAP will be releasing the note on PF changes along with the Budget changes on 20th Apr 2015. Kindly wait.

        With Regards,

        S.Karthik

        (0) 
        1. Aman Tyagi

          Hello everyone,

          There is no note being released for these changes.  The simplest way to implement them is to delimit the previous record and create a new one with the new values for PF admin charges w.e.f. 1.1.2015.

          Apart from these changes, the minimum Admin charges(for functioning and
          non-functioning establishment) related to PF and EDLI are to be done at the
          organization level itself.

          Earlier, those organizations who have employees less 20 were exempted from
          PF. However, the government has made it mandatory for all the
          organizations(small or big) to contribute towards PF. Hence a  minimum amount
          needs to be paid to Govt. at the organizations end for each establishment.

          EPFO has mandated to use ECR only as the reporting format.

          Apart from the Admin Charges reduction other do not impact the employee
          payroll directly. The conditions at the establishment level need to checked and
          addressed at the establishment level.

          (0) 
          1. Premavathi Raja

            Hi Aman,

            Thanks for the details. I found the delimited entries by clicking on expand option.

            I have completed this in DEV and performed payroll run for an employee. I can view the calculated amount after the changes. Now how to check the reduced amount of Jan & feb in the annual report. How to check it. pls reply.

            Thanks

            (0) 
          2. Premavathi Raja

            Hi All,

            I have made changes in V_T7INF3 and activated the feature. Now I have to run payroll for March with Jan, Feb PF changes. I tried to run a forced retro.

            March amount is calculated correctly. Jan & Feb reduced amount need to be checked. Which wage type need to be checked for the difference amount of Jan & feb. Pls reply

            Thanks in advance

            Prema

            (0) 
              1. Leela Mohan Post author

                Dear Mates,

                There is no note for this changes, Already issue has been raised to SAP and given the solution by SAP as mentioned screen shot

                PF Changes .png

                If you feel this is good information kindly like or give Rating…!

                Ur’s Mohan

                (0) 
                1. Premavathi Raja

                  Hi Mohan,

                  We have also received the same details. Also they have told us to maintain the minimum value with the organisational level.  Gothrough the below reply as sent by SAP. If you have received the same, where to maintain the minimum value? Pls let me know.

                  If you have changed the reduced value, let me know how to check the reduced values for JAN & FEB.

                  (0) 
                    1. Premavathi Raja

                      Hi,

                      Thanks for the details. I have done the configuration successfully and got the exact calculation for Mar month (DEV system). Need to know about the reduced amount of Jan & Feb. Hope we need t run forced retro for the 2 months. If so how the check the amount – which wage type, pls specify.

                      Also we have to fix the minimum values at organisational level. How t do this. Is there any SAP note.

                      (0) 
              2. Premavathi Raja

                Hi, Priya,


                I received the below reply from SAP


                Hello team,

                Thank you for contacting SAP’s Active Global Support.  Please check

                the solution offered by our Development Team as given below:

                1. Execute the transaction SM30.

                2. Enter the view name as  V_T7INF3

                3. Click on maintain

                4. Select the latest record of of Ctype – 1 and edit the end date to

                31.12.2014

                5. Save the entries.

                6. Copy the latest entry which you have edited recently and change the

                following

                    -Start Date : 01.01.2015

                    -End Date  : 31.12.9999

                    -PF Adm    : 0.85

                5. Save the entry.

                Please note that the minimum Admin charges(for functioning and

                non-functioning establishment) related to PF and EDLI are to be done

                at the organization level itself.

                Before, those organizations who have employee’s less 20 were exempted

                from PF. However, the government has made it mandatory for all the

                organizations(small or big) to contribute towards PF. Hence a  minimum

                amount needs to be paid to Govt. at the organizations end for each

                establishment.

                EPFO has mandated to use ECR only as the reporting format.

                Apart from the Admin Charges reduction other do not impact the

                employee payroll directly. The conditions at the establishment level

                need to checked and addressed at the establishment level.

                (0) 
                  1. Premavathi Raja

                    Hi Priya,

                    Select the first entry – CType 1

                    Click on Delimit – Start date will appear enter the date as 01.01.2015 and save the entries.

                    Now select Ctype 1 and click on expand. It will expand the date wise entries. Then update the change for EPF admin charges as 0.85 for 01.01.2015 to 31.12.9999. Try these steps if not I can send a word document with screen shots.

                    Thanks,

                    Prema

                    (0) 
                  2. Premavathi Raja

                    Hi All,

                    Any one have completed the EPF charges changes in SAP. I have only completed the reduced amounts in configuration. Let me know if any notes have been created by SAP on the comparison of the total with minimum fixed amounts of EPF and EDLI.

                    Also let me know on the retro calculation from Jan 2015.

                    Thanks

                    (0) 
  1. Ravi Kishor Manekar

    Hi experts

    As per the this i have maintained the account 2 as 0.85% from 1.10% but what about the minimum fixed amount of EPF and EDLI ?

    Even i am waiting for the same is there any SAP notes which has been released for the minimum fixed amount of EPF and EDLI then do let me know or please share on SCN.

    Awaiting for your reply as its critical issues from client side.

    Regards

    Ravi Manekar

    (0) 

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