Originally Posted by
Five Green
They do not take out 15% as you say. Instead they take the sum of the base pay and all the credits and add 15%. This is CX's retirement contribution. You can elect to take it in cash or have it invested in a CX sponsored retirement scheme. However, note that this is not a IRS recongnized retirement plan and some serious issues regarding taxation remain as to how this income will be treated once the fund is fully vested (10 years). Due to this fact and the limited fund investment and managment options many just elect to take the contribution in cash.
The provident fund contribution is 15.5% and is a percentage of the base salary only. Hourly duty pay, overtime, and qualification pay are not provident fundable. You can take this as cash in your monthly pay and it is then taxable and subject to with holding tax in the US.
FO.