PF-BAsic>6500-Employee contribution

As per the latest laws in effect, an employee needs to contribute 12% of his PF Basic as PF contribution.
The employer needs to contribute 12% of the PF Basic to the employee's account.
The rate is generally published by the government. 12% is mandatory.

Thanks
Nivya

Thanks Nivya.But my friend is being deducted only the minimum 780 though the basic is 12500.What can be done??? cheers, Divya

Dear Divya,

PF is not calculated with Gross salary. It is calculated with the Basic component of the salary.i.e. a salary consists of Basic, HRA, other allowances, Conveyance etc as components. In this the Basic alone is taken and 12% of that is calculated as PF.

In your friend's case, Rs. 12500 should be his gross salary out of which Rs. 6500 should be his Basic. From this 12% would be Rs. 780 which is deducted as Employee PF.

Thanks
Nivya

Dear Divya,
As per policy compulsary contribution is 12% of 6500/- after that its voluntary contribution so many org. only deposit the compulsary contribution i.e 780/- only.
So there is no issue if your frend's pf deduction is only 780/-.

Regards,
Shilpi

Hai ,As per the rules the Employee should contribute 12% on actual Basic+ DA drawn not on 6500 .... as u asked 780 ie 12% of 6500 this is an option left to the employeer he can or need not but if he is contrubting he should contribute minimum 780 ie 12% of B+DA but 1.61% administration charges is on actual basic + DA contrubited from the employer

Dear

MINIMUM AMOUNT OF PF DEDUCTION IS 12% OF RS 6500 (BASIC SALARY) IF YOUR FRIEND BASIC SALARY IS RS.12500 OR MORE THAN IT .THEN IF EMPLOYER WANT THEN PF CAN DEDUCT ON RS.12500.BUT IF YOUR EMPLOYER DNT WANNA DEDUCT ON TOTAL BASIC SALARY I.E RS 12,500. THEN U HAVE TO DEDUCT PF ATLEAST ON RS.6500 (BASIC SALARY).

AT THE TIME OF INSPECTION,IF PF INSPECTION TAKE ANY OBJECTION THEN U CAN CLEAR HIM THAt YOU ARE DEDUCTION PF ON RS.6500 (BASIC SALARY)I.E RS.780.

Hi,
Thanks all.My friend's basic+DA is 12500 and not the gross.Everyone has posted different replies.Can anyone pls tell me what is as per the law?Is it as per the law that if the employer wishes he can choose to deduct only the min required amount(780)no matter what the actual basic is???
Cheers,
Divya

Divya, Minimum limit is 780 but its upto the employee if he want to opt for more than 780 (i.e on actuals), that can be done upto any value.

Hi divya,

PF act says that you have to deduct 12% of basic +DA if the same is less than 6500 and if it is equal to or more than 6500, we have to deposit 780as PF.
Further, can anybody advice me the amount of voluntary contribution that an employee can do to his own PF account? does that has any limit.

Rgds
Manjali