Provident Fund 
Purpose
This component helps you create and maintain information on employee Provident Fund. Provident Fund is a statutory contribution, and consists of two parts:
· Provident Fund (PF) - Both, the employee and the employer, contribute a fixed percentage of the PF basis towards a Provident Fund. The minimum percentage contributed is as specified by the authorities.
· Pension Fund - The employer contributes a fixed percentage of the PF basis towards the Pension Fund of an employee. The minimum percentage contributed is as specified by the authorities.
In addition to contributing towards PF and Pension Funds of the employee, an employer also contributes to the Employee's Deposit Linked Insurance (EDLI). An employee may choose to contribute a certain percentage towards a Voluntary Provident Fund (VPF)
Using the Provident Fund component you can create, maintain, process the following for your employees:
· PF
· Pension Fund
· EDLI
· VPF
Integration
The Income Tax functionality refers to the wage types of the PF component (annual values) while processing rebates under Section 88.
Features
· Trusts and Trust Types
You maintain the PF and the Pension funds of the employee(s) in PF and Pension Fund trusts. In the SAP R/3 System, you can categorize these trusts as belonging to one of the following Trust Types:
¡ Excluded Trust - In this case the system will process the entire PF contribution of the employer and employee towards the trust. The system will not compute EDLI, EDLI Administration charges, or Pension Fund contribution.
¡ Regional Provident Fund Commissioner (RPFC) - In this case, the system will process all the contributions (PF, Pension, EDLI) towards a Government trust.
¡ Exempted Trust - In this case, the system will process the EDLI, EDLI Administration charges and Pension Fund contribution towards a Government trust. The PF contribution is will however, be processed towards a trust other than the RPFC
To configure the different types of trusts and the contribution percentages towards the different PF components, go to the IMG under Payroll India ® Statutory Social Contributions ® Provident Fund.
· Provident Fund Contribution Infotype (0587)
You can maintain the PF details for an employee using this infotype. You can maintain details such as the:
¡ Basis for Employee contribution
¡ Basis for Employer Contribution
¡ Trust ID of the PF and Pension Fund trusts, in which your company maintains employee PF
¡ VPF amount
¡ Employee Identification Number in the PF and Pension Fund Trusts
· Reports
You can generate annual and monthly reports for both PF and Pension Fund contributions.
Provident Fund
¡ Use the Employees' Provident Fund - Reports (HINCEPF0) to generate the following monthly PF forms:
§ Form 5 - You can generate this for employee(s) who qualify for the PF, Pension Fund and EDLI membership for the first time.
§ Form 10 - You can generate this report for employees leaving the service, or leaving the PF trust for which you are generating the report, in the current payroll period.
§ Form 12A - This report is a monthly report on the wages paid and recoveries made in the current payroll period, as the Employee and Employer's contribution.
¡ Use the PF Report (HINCEPF1) to generate the following annual PF forms:
§ Form 3A - Use this report to obtain a statement on the PF contributions made towards Un-exempted establishments. This is an annual report.
§ Form 6A - This report provides consolidated contribution statement for the financial year.
Pension Fund
¡ The PF reports( for exempted trust ) Report (HINCEPN0) to generates the following monthly Pension Fund forms:
§ Form 4 - This report provides details of employee(s) joining the Pension Fund trust during the current payroll period.
§ Form 5- You can generate this report for employees leaving the service, or leaving the Pension Fund trust, for which you are generating the report, in the current payroll period.
§ Form 6 - Use this report to obtain information on the contribution made by the employer, in the current payroll period.
¡ Use the Pension Reports(HINCEPN1) to generate the following annual Pension Fund forms:
§ Form 7 - Use this report to obtain information on the employee(s) who qualified for membership to the Employee Pension Fund.
§ Form 8 - This report provides consolidated information on the contribution made by employees towards the Pension Fund.
· To generate the Monthly reports on Employee PF and Employee Pension Fund contribution from the SAP Easy Access, choose Human Resources ® Payroll ® Asia/Pacific ® India ® Subsequent Activities ® Per Payroll Period ® Legal Reports
· To generate the Annual reports on Employee PF and Employee Pension Fund contribution from the SAP Easy Access, choose Human Resources ® Payroll ® Asia/Pacific ® India ® Subsequent Activities ® Annual ® Legal Reports
· User Exits
¡ When an employee joins mid-month or if there was a loss of pay for an employee, the system by default will prorate the Employer Pension Basis. You can override this prorating of the employer Pension Basis by maintaining the EXIT_HINCALC0_002 User Exit in Enhancement HRINCEPF.
To access the same in the IMG, choose Payroll India ® Statutory Social Contribution ® Provident Fund ® Override Employer Pension Basis.
¡ The standard SAP R/3 System follows a Deduction Carry Forward method for retroactive PF processing.
If you want the system to perform the retroactive PF computations by the Gross Carry Forward method, you can do using the EXIT_HINCALC0_007 User Exit in the Enchancement HRINCGCF.
To access the same in the IMG, choose Payroll India ® StatutorySocial Contribution ® Provident Fund ® User Exit: Computation of PF by Gross Carry Forward Method.
¡ The Annual PF Report (HINCEPF1) and Annual Pension Report (HINCEPN1) display data for an entire financial year. If however, your company went live with the SAP R/3 system in the middle of a financial year, you will need to upload the PF and Pension Fund data for some payroll periods, from a legacy system.
§ To upload legacy data for the Annual PF Report (HINCEPF1), use the HR_IN_PF_REP_MARCH Add-in GET_MARCH_DATA Method.
§ To upload legacy data for the Annual Pension Report (HINCEPN1), use the HR_IN_PF_REP_MARCH Add-in GET_MARCH_DATA_PEN Method.
To access them in the IMG, choose Payroll India ® Statutory Social Contribution ® Provident Fund ® Add-In: March Data Upload for Annual PF/ Pension Report
See also:
