Provident Fund Calculation
Purpose
This process describes the calculations performed by the SAP system, while computing the Provident Fund (PF) for the employees.
Prerequisites
· You have maintained PF details for your employees in the Provident Fund Contribution infotype (0587).
· You have set the PF configurations in the IMG under Payroll India ® Statutory Social Contribution ® Provident Fund.
Process Flow
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1. The Provident Fund contributions function (P0587) reads the Provident Fund Contribution infotype (0587) for information on employee PF.
The function makes use of the Determining Cont type, PF Ref no and Pen Ref no feature (40EPF) to determine the set of values constituting the Contribution Percentage.
It reads the provident fund tables, for information such as Trust ID, Trust Type, PF, Pension Fund Contribution Rates and EDLI administration charges. You can view and maintain the information stored in these tables using the table views:
¡ Trust Master (V_T7INF1)
¡ Statutory rates for Provident fund (V_T7INF3)
¡ Company rates for Provident Fund (V_T7INF5)
¡ Trust details (V_T7INF7)
The Provident Fund contributions function (P0587) stores the information thus collected in the internal table EPF.
2. The Calculate Provident Fund Contributions payroll function (INEPF) makes use of the internal table EPF and calculates the following:
○ Employee EPF Basis, Employee VPF Basis, Employer EPF Basis, Employer PF Basis and Employer Pension Basis
○ PF and VPF contributions of the employee (annual and monthly contributions)
In case the sum of PF and VPF contributions exceeds the Employee EPF Basis amount, system displays either a warning or an error message.
You can configure the message type that the system must display in the IMG activity under Payroll India ® Statutory Social Contribution ® Provident Fund ® Define Message Type for Display in PF Calculation.
○ PF and Pension contributions of the employer
○ PF administration and EDLI charges
Calculate Provident Fund Contributions payroll function (INEPF) generates wage types for storing the results of the calculations for the different PF components such as PF, Pension Fund, VPF, and EDLI charges.
In the event of trust changes, the system provides for split information of the deducted trust wise PF contributions.
See also: