k2s Started The Discussion:
Dear All,

Please tell me how many no. of employees are needed in an organization to start PF? Does that no. include trainees also?

OSSAGHO Corporation,
S.C.O. 6, 1st Floor,
Novelty Plaza, Opp. Park Plaza,
Ludhiana - 141001 (Pb.)
TEL: +91 161 2772775
+91 161 2772745
URL: http://www.ossagho.com
Posted 30th November 2009 From India, Ludhiana
- The PF is applicable to all establishment who engage 10 or more employee's.

- All employee drawing basic salary/wages upto Rs. 6500/-.

In case basic salary/wages exceeds more than 6500/- the employer is not bound to pay employer contribution towards PF. Employee can voluntarily contribute to fund on his own ( Subject to company policy ).

In current scenario normaly PF-Employer contribution is a part of CTC and employer pay the contribution though it exceeds Rs. 6500/-.

Posted 30th November 2009 From India, Mumbai
dear sir,
but as per my knowledge, PF is applicable to those establishments who engage 20 and more employees, and PF contribution is there from the starting salary irrespective of a particular figure, please correct me if i am mistaken
Posted 30th November 2009 From India, Kakinada
Please clarify that PF is applicable for establishment having more than 10 employees or more than 20 employees.......
Posted 1st December 2009 From India, Ludhiana
Hi, As of My knowledge the PF will be applicable when the employees counting touches 20 as per PF Act
Posted 1st December 2009 From India, Madras
The PF Act applicable to those employers whose emploees count is 20 or more but a newly set up eshtablishment is exempted for the initial three years.
Posted 1st December 2009 From India, Calcutta
In factory act it is mention dat
• Min. no. of workers
 working on any day of preceding 12 months; and
 in any part of which manufacturing process is being carried on
o 10 or more (factory run with power)
o 20 or more (factory run without power
Posted 1st December 2009 From India, New Delhi
Dear H R folks,

Only for HR professionals - Don't you know even the basics of Acts applicable to an establishment. Amazing queries and answers. Where is the profession heading. Very very unfortunate. If your university or institutes are not teaching all those basics which are imp at least read basics..

Madan Mohan P Raju
GM - HR - BE
Posted 2nd December 2009 From India, Hyderabad
Pf is applicable to menpower above 20 and if salary structure is more rs/- 760 is paybale only
Posted 2nd December 2009 From India, Velluru
Dear Concerned,

No body is 100% perfect. At every step of our life we come to know new things and in case of my company we are planning to start PF and i m not very much familiar with some concepts of it. If you are too good then y you joined this forum? that means even you have some doubts. So you cant blame any one. A man is a continues learner.



Posted 2nd December 2009 From India, Ludhiana
Hi all

Mr.Madan Mohan rightly said that this is a very basic question which can be referred from PF act. Members can ask the difficult questions which may be tough to handle practically.

Posted 2nd December 2009 From India, Bhavani
Dear Mr. K.R.Shanmugham,

You have written so much for Mr. Madan Mohan I think if you woud have written something related to this topic i will really appreciate both of you. We are not here to show anyone down but this site is to share and help eachother.I will request you to do the same.



Posted 2nd December 2009 From India, Ludhiana
Dear Jon, Thanks for the posting but I will suggest you to choose right heading for your posting as this heading is related to PF. Regards, Shikha
Posted 2nd December 2009 From India, Ludhiana
Provident Fund (PF) is a statutory deduction to be done by employers as per the rules made by Government of India. As per the PF rules, both the employee and the employer make a contribution to the PF fund of the employee. Every month, the contributed amount gets added to the balance of the employee. The PF contributions earn a fixed interest (9% p.a.) and accumulate over the span of service of an employee. The intention is to make the employees to save for retirement, pension, etc.

In most cases, the Government (PF Board) collects this amount and keeps it in the employee's name. After an employee retires, all the contribution made by the employee along with interest is paid back to the employee. This is handled by the PF Board and the employer or company has no role to play in it.
For e.g. If my basic salary is Rs. 100/-, then I should contribute Rs. 12 as my PF. This will be deposited into my PF account. Along with my contribution, my employer also make a matching contribution of Rs. 12/- into my account. So, every month, my PF account increases by Rs. 24 (12-my contribution, 12-my employer's contribution) till the end of service.
Any salary revisions will automatically lead to changes in the PF contribution. However, if the salary changes are done to components that are not a part of basic salary, there is no impact.

According to the PF rules, all employees who draw a PF Basic of less than 7500 must contribute to PF. This is mandatory.
For employees having PF Basic more than 7500, the deduction/contribution is voluntary. If they want, they can opt for the deduction. Else, there need not be any deduction (from both the employee and employer perspective).
But in most companies, PF is applicable to all employees.

I think this answers your question

Posted 2nd December 2009 From India, Madras
To add one more point... For any company... PF will come into picture when the employee strength is atleast 20. Thanks Nivya
Posted 2nd December 2009 From India, Madras
Thanks alot Nivya for ur meaningful reply. I think i have got proper answer of my question. This would be of great help to me. Thanks, Shikha
Posted 3rd December 2009 From India, Ludhiana
May be they are just starting the carrier or else in certain companies they promote accounts people to take care of HR and those people may not be knowing the basics. The profession is totally different.

Posted 3rd December 2009 From India, Mumbai
I think BKC1965 is into some relations with Mr.K.R.Shanmugham thats why there thinking is of the same level. Please i will request you to come out of ego and share your precious knowledge with us, we are not here to show anyone down. I hope you understand.

Posted 3rd December 2009 From India, Ludhiana
Hi sir,
According to PF act the company whose have ing more or equal to 20ppl will deduct pf from employee salary,some companies who have 18 pll also deducting pf after the company get pf account from PF board the 12pecentage of employee basi salary will be deducted and other 12 pecen will add by employer But here some companies are not contributing this much for example we take reliance store it wlii deduct 12 %from employee but it add only 8 % from company side its because when the establishment of company it consist act&memorandum wat ever the company mention in that act it ll be given to employee but some times employer will do some adjustments so review ur company policy once
Its as per my knowledge If i am wrong pls let me know
Posted 3rd December 2009 From India, Hyderabad
Thanks K2s. One more point with regard to the relationship between IT and PF:
As per Indian Tax laws, any contribution done by the employee towards PF, can be considered as an investment under Chapter 6. This can help reduce the tax liability of the employee while offering a decent return on investment.

Posted 3rd December 2009 From India, Madras
Thanks alot Nivya for sharing your valuable knowledge. Nice to c ur reply again. Keep sharing the same. Regards, Shikha
Posted 4th December 2009 From India, Ludhiana
Thanks Mr. K.Aditya for your valuable reply. This adds to my knowledge. I will add to it if i will come to know more. Regards, Shikha
Posted 4th December 2009 From India, Ludhiana

I have observed the discussion. I have one doubt. It is clear that a company can include the employees into the PF Act once the employee strength reaches to 20.

But my question is should all the employees be permanent or there may be trainees in the number of 20 employees.........
Posted 4th December 2009 From India, Bangalore
Hai, The question raised because as per to PF Act Trainees are exempted from the PF facility
Posted 4th December 2009 From India, Bangalore
Hi Raj,

According to me the 20 no. represents employees and not the trainees. Trainees are not permanent members of an organisation. So 20 nos. includes employees only. Please correct me if i m wrong.



Posted 4th December 2009 From India, Ludhiana

Thank you sikha but my question remains unsolved. By your words all the 20 employees must be permanent type. is it?
and do a company can go for PF deduction as soon as it comes into operation with 20 permanent employees
Posted 4th December 2009 From India, Bangalore

The answer to your question is the service duration of trainees is fixed like 3 months, 6 months etc. and they are pais stipend not salary. but PF is deducted on basic salary. so trainees are not included in number of 20 ppl.
if you want to add something to it please do that.



Posted 4th December 2009 From India, Ludhiana
Dear HR Professionals, Please let me know,when an employee can withdraw his PF? Is it possible that he withdraws the money during his tenure or he can withdraw after his relieving? Regards, Shikha
Posted 5th December 2009 From India, Ludhiana
Dear KS2,

Here some PF related Answers for you.

01.Applicability-20 more
02.Salary range-Rs.6501(Whatever your salary)
03.Contribution-Employee-12% employer 12%PF Admin charges 1.10% on total wages+EDLI 0.50%+EDLI Admin Charges 0.01% total 13.61%

During latest inspection in our office PF Enforcement officer inform us that Whatever may be the salary those who have drawing more than Rs.6500/- will pay Rs. 780/- is ceiling(above than this employee you can deduct and contirbutue on own willingness and as per company policy) should paid.If salary less than Rs.6500/- whatever may be the salary should deduct 12% on the same.

If any queries you have. call me 09944706404.

Also for Seniors. We came to this site to Learn whatever the basic questions and indepth questions don't crticise us please share your knowledge to expertise.

Posted 6th December 2009 From India, Chennai
Dear Eswar .K,

Thanks for ur reply.I think you have explained beautifully and rightly said in the last.Really nice to c ur reply.My doubts are very clear now.For any further query i will definately contact you.



Posted 9th December 2009 From India, Ludhiana


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