Bhuvana.AL Started The Discussion:
Dear All,

An employee is drawing more than Rs.6500/ as basic and PF contribution is also being paid as per the rules. Do the company have to pay the same contribution the employee pays or it can restrict itself to Rs.6500 for employer contribution?

Please clarify.

Posted 21st September 2009 From India, Madras
Dear Bhuvana, PF Employer contribution can be very much restricted to Rs.6500/- It will save much more money to the organisation. regards V Ganesan
Posted 21st September 2009 From India, Madras
Dear Bhuvana Employer contribution to PF for the employee having basic more than RS 6500/-can be restricted to RS 6500/- with regards shanu
Posted 21st September 2009 From India, Delhi
Hi Bhuvana,

As per the PF rules Employee PF contribution can be paid for the full amount of their basic or it can be restricted to 6500/-. If the employee contribution exceeds 6500/- then there will be more burden on employer to pay more admin charges. So most of the companies restrict employee contribution to 6500/-

Even the employer contribution contribution also shall be restricted to 6500/-
There are some companies where in the employer & employee contribution will be for their full basic & they will add it to their CTC. Then the company is not loosing anything from their pocket.

Posted 21st September 2009 From India, Bangalore
Dear Bhuvana,

There is no such resrictions on PF contribution either from employee or employer. There are such companies who pays PF contribution irrespective of Basic Salary.

Now in case of employer contribution, the basic salary is restricted to Rs.6500/- only for Pension Fund contribution.

Posted 21st September 2009 From India, Mumbai

rajanikant mishra
Posted 21st September 2009 From India, Delhi

As per the provisions of the Act, the amount is restricted to Rs.6500/- . But it is the descretion of the management whether to entertain the restriction or not. In PF that is (account number 1), over and above will booked in this account.

But for pension whatever we pay, it is restricted only for Rs.6500/-. The remaining amount of contribution will book into account number 1 in PF.
Posted 21st September 2009 From India, Coimbatore
Hi, It is the option of the company to pay the employer contribution beyond Rs.6500/-. other wise you can restrict employer contribution for Rs.6500/- on basic+DA. Regards, Kanths
Posted 21st September 2009 From India, Hyderabad
As per statutory norms, the PF contribution by the employee and employer have to be the same amount. Either the Co can utilise a ceiling of having both parties (employee & employer) contribute only 780/- per month (in case of employee's basic sal being 6500 or above) or stick to the 12% of the basic sal.

Hope this clarifies.

Executive HR
Kingfisher Airlined Limited
Posted 21st September 2009 From India, Bangalore
As per law, Employer contribution will be 12%.

8.33% ------- Pension fund . (Calculation on Rs 6500. So maximum will be Rs 541 Per month ).

3.67%-------- Provident fund (on basic + DA of employee's salary).

If suppose, emplyee basic + DA is more than Rs 6500 ,eg, Rs 10,000 than contribution to Pension fund will be Rs 541 than adjusted amount will be transfer to Provident fund amount which will be 659.

Hope this is more clear . 8-)
Posted 21st September 2009 From India, Pune
As per PF Act, the PF contribution by the employee and employer have to be the same amount. In this case of employee's sal Should be more than 6500 or above then 12% of the basic salary will be taken for PF Cal from Employee and the Employer will be paying 13.61 % for PF.

Employer 13.61%


3.67% = Provident Fund (A/c No.1)

8.33% = Pension Fund (A/c No.10)

0.5% = EDLIS -Employees Direct Linked Insurance Scheme (A/c No.21)

Administrative Charges:

1.10% of emoluments = Provident Fund (A/c No.2)

0.01% of emoluments = EDLIS (A/c No.22)
Posted 21st September 2009 From India, Madras
Hi Bhuvana,

Mr. Rajendra Marathe is correct,

There is no such type of rules where the basic salary is restricted to Rs, 6500/-, you can contribute your PF contribution on your actual basis salary, if more than Rs. 6500/-. But if your basic salary is more than 6,500 and you are contributing your pf amount on that so your company has to contribute the same amout on your actual basic salary, so it will be more burden on employer to pay more money and also admin charge will be more. So most of the company restricted their PF elligible basic salary to Rs. 6500/-. So it is totally depend on managment rules, how much benifit they want to give their employee.

Rs. 6,500 is restricted for Pension & EDLI part only. The RPFC can provide the Pension & EDLI benifit upto Rs. 6500/- only. You can contribute to Pension account (A/C - 10) upto Rs. 541/- (Rs. 6500 x 8.33%) not more than that.


Dibyendu Ghosh
Posted 21st September 2009 From India, Calcutta
Dear Bhuvana, Company neednot to pay its contributions more than RS.6500. But in some companies they are contributing on the total salary also.
Posted 21st September 2009 From India, Madras
Hi This is Mahesh here ,
I have applied My PF on 26/06/2009,But till now I have not recived my PF amount my Pf No is 7921 so plz can i get the updation regarding the same

thanks and regards
Mahesh k
Posted 21st September 2009 From India, Bangalore
Hi Mahesh,

Did you submit the forms in PF department or with the earlier employer. If with employer it takes minimum of 90 working days hence there are few process.

If you have submitted in PF department then it should come to you in 30 days, but due to the delay in PF department it takes even more than 2 months.
Any how you better contact to the PF department and ask the status with full PF number or take the acknowledgement with youl
Tell me the company location & the PF office location.

Posted 21st September 2009 From India, Bangalore
As per P.F Act/ rules, the employer cotribution towards P.F is 12% on basic salary out of which an amount of Rs 541/- on Rs 6500/-@8.33% is paid towards pension fund and the remaining balance of Rs 231/- is adding to employee account(6500x3.67%) even If any employee draws more then Rs 6500/- for month the total cotribution towards Pension Fund is restricted toRs541/-the balance goes to the employees account. here if P.F is restricted to Rs 6500/-the burden of P.F Administrative charges of 1.61% on the total P.F salary is saving to the company. now a days many companies adding the same in the Employees C.TC, hence it is no loss to the companyand the Employee may fell that more amount is adding to his P.F.
Posted 21st September 2009 From India, Hyderabad
hello Bhuvana,

If the employee is Contributing PF on more than 6500/- basic, then even company has to do the same amount of contribution. only if employee also restricted to 6500/-, company can restrict to Rs. 6500/-.

Posted 21st September 2009 From India, Tumkur
Its really nice to see such a discussion and contribution from fellow HR colleagues. Keep It Up.
Posted 21st September 2009
Dear, There is no such obligations on employer. If employees wants PF on more than 6500 basic then he has to pay 100% from his salary. Best Regards Sunny Mahajan HR- Executive.
Posted 22nd September 2009 From India, Calcutta
Hi All,

in current scenario most of the companies are hiring on th basis of CTC that includes both portion of PF (employee & employer). in such situation there is no point to have ceiling upto 6500/- as all is to be deducted from CTC itself.

Companies which are hiring on cash in hand, can restrict PF upto basic of Rs. 6500/- as per statutory.

Hope I am correct....

Posted 22nd September 2009 From India, New Delhi
as per Central Exices PF department PF is resticted to rs 6500/- on basic salary but its depend upon the employer management that wheather they applicable pf for all or they applicable pf scheme only whoes salary is below Rs 6500/- ( basic) and employee & employer both should contribute ir 12% by both of them another policy i.e. most of PVT LTD companies they deduct emloyer contribution from employee CTC so cant do anything they misguide u at the time of appointment means at the time of CTC structure so be aware abut that
Posted 22nd September 2009 From India, Mumbai
As per the act, Employee should contribute 12% of (Basic+DA) and Employer should also contribute 12% of (Basic+DA). But 12% of Employer contribution will be calculated as below

Employee Pension Scheme = (Minimum(PF Wage, 6500)*8.33%)
Employer PF cont = Employee PF - EPS calculated above

Arul Prakash D.
Payroll Analyst
Icomm Technologies

Posted 22nd September 2009 From India, Madras
Dear sir,
Good afternoon
I am Hr Excutive in one of the company. I have full responsibility to facilitates pF and ESI to my employees.
So please tell me the procedure how to approach authorities and send the forms also.

Santhosh Kumar.G
Posted 22nd September 2009 From India, Hyderabad
Dear All

In line with the same issue, request a response to the next scenario:

Employer and employee is currently contributing 12% of basic into PF (basic being higher than Rs. 6500/-); and employee now wants to restrict his contribution now to only 12% of Rs. 6500/- basic, ie. Rs. 780/- pm, can this change be done in sal, employer PF contributions being part of CTC.

Purpose behind this request is that the employee wants a higher take home package. [ He will get his the amount from his reduced PF deductions plus the employer's reduced contributions as increased take home (net) sal.]

What are the implications from a statutory standpoint to implementing this change?

Appreciate some inputs on this

Rose S
Posted 22nd September 2009 From India, Mumbai
Dear All,

As per statute the company is bound to pay PF contribution upto rs 6500/- but beyond the said amount it is absolutely company's discretion to pay or not to pay the matching amount. There are many companies who are paying PF contribution on basic +DA exceeding Rs 6500/-. It all depends on the Company. Since PF is a social security scheme and also keeping in view the financial distress a person might face at the old age most of the big MNCs pay the PF contribution on actual basic + DA.
Posted 22nd September 2009 From India, Calcutta
Hi Bhuvana / Jeeva,

PF is a part of CTC. For that reason when you negotiate your salary for a new job, say, Rs.5 lakh is the annnual CTC, company cannot deduct 24% totally.

There are companies that argue that Ee PF and Er PF contributions are in this cTC that was agreed by employee. That means, Ee 12% and Er 12% are in this CTC and for this reason we cannot 24% totally. Hope you understood.

PF office has come heavily on this that deduction this way is illegal. This topic was spoken on many occasions in this forum.

Posted 22nd September 2009 From India, Madras

I am quite satisfy with your explanation but in normal CTC what we offer to our employees, is employer's contribution included in that and if not then how one can maintain the amount from employer contribution as it is with the option with a particular employee whether one would like to go for PF or not.

Please provide me necessary solution in this regard.

Thanks & regards

Sanjay Saha
HR Executive
Posted 22nd September 2009 From India, Mumbai
Aear All
PF can be calculated on what ever percentage suites your co. in case of basic more than6500- but only 8.33 % of 6500(Rs541) will atract eps which will be deposited in acc. no. 10 rest will go to acc. no 1.
Lalit kandpal
Posted 23rd September 2009 From India, Delhi
Dear all the Management consultenccy is Exempted from labour law. please give the details regarding this issue. Regards, Santhosh
Posted 24th September 2009 From India, Hyderabad
Dear Bhuvana.

if a employee draw the basic more than 6500/- then his contribution is on actual basic he drawn. And also the Employer is contribute on that current basic.

For ceiling amount 6500/- the employee and employer has to pass mutual order to strict the contribution with in the limit of 6500/-.

Ankur Rana
Posted 24th September 2009 From India, New Delhi


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