Query Regarding Employee PF exemption drawing salary > 6500
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Query Regarding Employee PF exemption drawing salary > 6500

psandeepe Started The Discussion:

Hi all,

Let me introduce myself.....I am Sandeep joined as HR in a Pharma company in Hyd.

In our organization there are few managers who wants to exempt themselves from PF saying that their wages(basic) is more than Rs 6500/- and they do not want to contribute to PF.

There was no PF earlier, now management has taken a decision to include PF to all employees irrespective of their wages & make it uniform across all types of employees.

Now my query is

1. Manager X's basic is now fixed at Rs 10,000/-, is it mandatory as per law to exculude him completely from PF.

2. Or should we limit his wages to Rs 6500/- and deposit 12% of employees and a2% employers share on this.

3. Or should we pay employees share of 12% on Rs 10,000/- and limit employers share to Rs 6500/- (i.e Rs 541 to pension and Rs 239 to EPF)

4. Or should we pay employees share of 12% on Rs 10,000/- and limit employers share to Rs 6500/- (i.e Rs 541 to pension) and remaining amount Rs 659/- to EPF).

Is employee given an authority in PF act to exempt himself from PF contributions ?????

Request all expert and professional opinions and inputs on the above..

Awaiting your response..

Regards,
Sandeep

jasmeetdhir - Member Since: Sep 2008
Sandeep,

About Pf what i know is :

1. Below 6500 (basic), PF is mandatory
2. Above 6500 (basic)
* PF Can be calculated on actuals(i.e 12% of basic)
* You can freez the pf amount: If the actual PF amount is > than the freezed amount,then freezed amount will be deducted.
* If the PF is calculated on actuals, then please do not keep Special allowance in your breakup, as actual PF is calculated on it also. You can replace special with uniform allowance.

psandeepe - Member Since: Dec 2006
Hi all,

I am awaiting for a response from you all....

Also there is a clause if wages > 6500/-, say 10K, PF contribution has to be made with mutual consent from employer and employee on 10K..

what happens if employee does not agree to it ??

cpbhartia - Member Since: Oct 2009
If your company is implementing the PF for the first time, deducting PF for those drawing basic salary more than 6500 is not mendatory. But, the policy has to be uniform in the organisation. If you deduct, the PF & EPF will be calculated on 6500/- only.

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