prathimareddy Started The Discussion:

I would like to know what would be the employer contribution towards PF if the basic of an employee is Rs.10000/-. Is it 12% of 10000/-???

I heard that the organisation is liable to contribute towards PF only a maximum of 12% of Rs.7500/-??

I also want to know if the emplyee does not wish to contribute for PF whose basic is more than Rs.7500/-, is it mandatory by the employer to contribute towards PF for the particular employee?

Kindly clarify.
Posted 20th September 2006 From India, New Delhi

Regarding PF, if the employee basic wages exceeding Rs.6500/-, there is

no liability on the part of employer to pay PF contribution.

If employee joined with less than above basic, continuing service with

more than the basic of Rs.6500/- , employer bound to pay PF contribution

on the Rs.6500/- only (.i.e.Rs.780/-),eventhough his basic salary more

than that.

Hope get clarification on the same.

Satish Raz
Posted 20th September 2006 From Germany
Hi Prathima, ceiling was 3500/- upto 01.10.94, then revised to 5000/-. Then it revaised to 6500/- from 01.04.1995. and remains same, further there is no amendment. Satish
Posted 20th September 2006 From Germany
and IF employee want to contribute 12% on whole 10,000 then employer has to contribute 12% on whole 10,000
Posted 23rd September 2006 From India, Pune
Hi,I have a doubt reg contribution to PF.My doubts are:1) Is it mandatory on the part of the employer to deduct PF of Rs. 780/- (12% on Rs. 6500[ceiling amount]), from the salary payable to the Employee, even if the BASIC+DA of exceeds Rs. 6500-/.2) Is it mandatory on the part of the employer to contribute Rs. 884.65 (13.61% of Rs. 6500[ceiling amount]) to the PF Fund, even if the BASIC+DA of the employee exceeds Rs. 6500/-Pls clarify my doubts.Regards Saravana
Posted 2nd June 2008 From India, Bangalore

As the Law goes, PF has to be deducted @ 12% on Basic+DA subject to a maximum Basic & DA of 6500 if they are submitting the amount with RPFC. But if a company manages its PF through a trust then it can contribute towards PF at the actual Basic+DA, i.e even if it is more than 6500.

Posted 2nd June 2008
Posted 2nd June 2008 From India, Mumbai
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File Type: doc PF_-_For_Employees.doc (29.0 KB, 1271 views)
File Type: doc PF_-_EXEMPTIONS.doc (73.5 KB, 846 views)
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File Type: doc benefits_of_PF.doc (47.0 KB, 714 views)
As per the PF act employer has to contribute 12% as well as employee has to contribute 12% of his (Basic+DA) towards PF. I want to know from that 12% there is a break up of 8.33 % and 3.67%. Towards what does the 8.33 % and 3.67 % go to?
Posted 16th August 2008
Hi Aditi,
Following are the different Heads of the Provident Fund Account, where the money goes.......

Account No1 (PF) ................................. 12% (of Employee Cont. on Basic+D.A.) + [ (12% of employer's Cont.)- (3.67% or 541.00, which ever is minimum) ]

Account No.2 (Admn charges on PF) .......... 1.1 %

Account No.10 (Pension Fund) .................. 8.33% (Subject to Maximum of Rs. 541.00, Limit being Rs.6500.00)

Account No. 21 (EDLI Charges) ................ 0.5 %

Account No. 22 (Admn. charge on EDLI) ...... 0.01%
Posted 19th August 2008 From India, Delhi
Hi all City HR members,

thanks to tell me the celling amount of PF Rs. 6,500/-
but my problem is that which act says the celling amount of PF is 6,500/-
actually i want to give a reply to our ex-employee.

plz help me

Posted 5th May 2009
HI Prathima reddy & Saravana

As per the rules If the employees basic is more than 6500 then

Employee contribution can be limited to 6500 or for the full

basic amount.

Employer contribution is limited to basic of 6500 that is

contribution amount is 780/- or even the employer can

contribute even for full basic amount as per ur question for

full 10000 that is 1200/-. This practice is in some companies.

The both contribution includes to your CTC.
If employee is not contributing his share then no need of

employer contribution.


Jeevarathnam Reddy
Posted 12th September 2009 From India, Bangalore
The statutory rate of contribution is 12% on the salary limit of Rs.6500/-pm.
If the establishment ready to contribute over and above the salary limit, it can do so, that it can contribute 12% on total salary of Rs.10000 or any.
If the employee wants to contribute over and above 12%, he can contribute so and the company can restrict its contibution to 12% on Rs.6500
option 3
if the salary of an employee (new employee, not existing pf covered employee who have increased wages) is more than 6500, he need not be a member of PF, if he wants and a letter has to be given by him to the management for not to deduct pf from his salary as he is drawing more than 6500.
Posted 12th September 2009 From India, Madras
Dear Yogitha, PF act only says about the ceiling limit of salary for pf deduction. You can also refer the website:(EPFO) at for clarification
Posted 12th September 2009 From India, Madras
Dear Adithisangam,
The entire amount of employee contribution towards pf will be remitted in Account No.1
The employer contribution of 8.33% of the PF wages is to be remitted in Account NO.10 as is termed as Family Pension Scheme amount (FPS).
The balance 3.67%(that is the balance amount (12%amount less 8.33%amount(FPS)) is to be remitted in account number 1 along with employees' share, under employers share column.

The whole employee contribution and 3.67% of employer contribution will be paid back to the employee with interest at the time of his withdrawal or superannuation or death.
The amount contributed to FPS fund will be returned to the employee by the way of Pension on his completion of 58th year.
It is your duty to explain the left employees to get the pf accumulations transfered instead of withdrawal, then only the PENSION SCHEME WILL fullfilled its goal.
Posted 12th September 2009 From India, Madras
I am Computer Professional in Forest Department, Haryana.

department give me 9000+500 medical = 9500/-

tell me how can i open CPF account and what amount is monthly subscription for me and what is for the department.
Posted 20th April 2010 From India, Ambala
Is there any liability for employer to contribute for PF if employee gets more than 6500 salary month while recruiting new hands.
Posted 11th November 2010 From India, Coimbatore
Shall management to contribute 12% ie Rs 780/- @ 6500/- when we recruit new hands with the salary of 10000/-
Posted 11th November 2010 From India, Coimbatore


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