The PF contribution is 12% of Basic salary from both employee and employer. For the calculation the maximum limit of Basic is Rs 6500/-. It means even if the employee's basic salary is above Rs 6500/- the employer is liable to contribute only on the Rs 6500/-, that is Rs 780. However if an employee so desires he may voluntarily contribute more than 12%. Apart from it an employer also has to pay some administration charges. (say about 13.61%)
It is applicable to establishments employing 20 or more persons and engaged in any of the 180 industries / Classes of Businesses specified.
Co-operative Societies, employing 50 or more persons & working without the aid of power. Some sectors are exempted who have their own Fund to pay on retirement of the employee, which are exempted from the Act.
HOWEVER there are also some firms who are registered for PF in other states and making the Ministry of Labour, GoI, as clean fools for long and escapes without remitting and the PF authority is also closing their eyes, with which the employees suffer on retirement/retrenchment, due to non-remittance. Later they adopt the option to send arrest warrant (but making it bailable). So get the PF Number and remittance from the relevant PF Office immediately after deduction. Some one man private limited companies the clever-employer.
Besides some firms show a very low basic salary so as to cut down the employer contribution, which are all not taking care by the PF Authority nor forgetting till the "stitch in time becomes to nine or more."
.
From India, Kochi
It is applicable to establishments employing 20 or more persons and engaged in any of the 180 industries / Classes of Businesses specified.
Co-operative Societies, employing 50 or more persons & working without the aid of power. Some sectors are exempted who have their own Fund to pay on retirement of the employee, which are exempted from the Act.
HOWEVER there are also some firms who are registered for PF in other states and making the Ministry of Labour, GoI, as clean fools for long and escapes without remitting and the PF authority is also closing their eyes, with which the employees suffer on retirement/retrenchment, due to non-remittance. Later they adopt the option to send arrest warrant (but making it bailable). So get the PF Number and remittance from the relevant PF Office immediately after deduction. Some one man private limited companies the clever-employer.
Besides some firms show a very low basic salary so as to cut down the employer contribution, which are all not taking care by the PF Authority nor forgetting till the "stitch in time becomes to nine or more."
.
From India, Kochi
Dear Franklin and other,
I am sorry to say this. There are innumerable establishments which evade PF to their employees. There is no escape for Govt.depts./co and private, all are cheats & robbers of poor employees. I worked in Govt. (state & central), PSUs, Private firms & co's. This lawlessness is ramphant every where. For the sake of employment poor people keep mum. Many PSUs engage 1000s thro contractors, terminate them after some time to avoid all these benefits, reengage them thro' some other fictitious contractors/names. These are happening in connivance of corrupt PF/ESI officials. In this private firms are some what better compared to govt. firms.
The pathetic situation is - many employer recover PF subs. from their employees but fail to remit to the PFO. In many firms employees leaving the Estt. not able to obtain their PF settlement because estts. didn't remit the contributions to the PFO.
Franklin pl.note: The PF admn./inspection charges are either payable by the PF Trusts or by the employer to the PF Commissioner and the same is not 13.61% as you mentioned. Pl.note these points:
Employer
Coverage
Establishments employing 20 or more persons and engaged in any of the 180 industries / Classes of Businesses specified.
Co-operative Societies, employing 50 or more persons & working without the aid of power.
Establishments not coverable statutorily can come under the coverage of the Act statutorily.
An establishment continues to be covered under the Act, irrespective of the fall in the employment strength.
Since the Act applies on its own force to the establishments, the employers are required to file the particulars in the specified format for registration and allotment of business number.
Financial Obligations:
Contributions:
Statutory rate of contribution is 12% of emoluments (basic wages, dearness allowance, cash value of food concession and retaining allowances if any,) in the case of 175 establishments.
Rate of contribution shall be 10% in the case of the following:
Brick, beedi, jute, guar gum factories, coir industry other than spinning sector.
Establishments declared as sick undertakings by BIFR.
A matching contribution is to be collected from the emoluments of the employees.
Out of 12% (or 10% as the case may be) of the employer’s share of contribution, 8.33% is to be remitted towards pension fund.
Employer is also required to pay a contribution of 0.5% of the emoluments towards EDLIS’1976.
Administrative Charges:
An employer is required to pay administrative charges at 1.10% of emoluments towards provident fund charges and 0.01% towards EDLI Scheme 1976.
No separate administrative charges for pension scheme
Inspection Charges:
In respect of exempted establishment under P.F. Scheme employer is liable to pay only inspection charges at the rate of 0.18% of emoluments.
In the case of establishment exempted from EDLI Scheme, the employer is required to pay only inspection charges at the rate of 0.005% of emoluments.
Interest Liability:
For belated remittances of contributions, administrative / inspection charges interest at the rate of 12% on such remittances for the period of delay is to be remitted.
I hope this will be of help to you all.
For further information browse this link:
EPFO <link updated to site home>
With regards,
kumar.s.
From India, Bangalore
362I am sorry to say this. There are innumerable establishments which evade PF to their employees. There is no escape for Govt.depts./co and private, all are cheats & robbers of poor employees. I worked in Govt. (state & central), PSUs, Private firms & co's. This lawlessness is ramphant every where. For the sake of employment poor people keep mum. Many PSUs engage 1000s thro contractors, terminate them after some time to avoid all these benefits, reengage them thro' some other fictitious contractors/names. These are happening in connivance of corrupt PF/ESI officials. In this private firms are some what better compared to govt. firms.
The pathetic situation is - many employer recover PF subs. from their employees but fail to remit to the PFO. In many firms employees leaving the Estt. not able to obtain their PF settlement because estts. didn't remit the contributions to the PFO.
Franklin pl.note: The PF admn./inspection charges are either payable by the PF Trusts or by the employer to the PF Commissioner and the same is not 13.61% as you mentioned. Pl.note these points:
Employer
Coverage
Establishments employing 20 or more persons and engaged in any of the 180 industries / Classes of Businesses specified.
Co-operative Societies, employing 50 or more persons & working without the aid of power.
Establishments not coverable statutorily can come under the coverage of the Act statutorily.
An establishment continues to be covered under the Act, irrespective of the fall in the employment strength.
Since the Act applies on its own force to the establishments, the employers are required to file the particulars in the specified format for registration and allotment of business number.
Financial Obligations:
Contributions:
Statutory rate of contribution is 12% of emoluments (basic wages, dearness allowance, cash value of food concession and retaining allowances if any,) in the case of 175 establishments.
Rate of contribution shall be 10% in the case of the following:
Brick, beedi, jute, guar gum factories, coir industry other than spinning sector.
Establishments declared as sick undertakings by BIFR.
A matching contribution is to be collected from the emoluments of the employees.
Out of 12% (or 10% as the case may be) of the employer’s share of contribution, 8.33% is to be remitted towards pension fund.
Employer is also required to pay a contribution of 0.5% of the emoluments towards EDLIS’1976.
Administrative Charges:
An employer is required to pay administrative charges at 1.10% of emoluments towards provident fund charges and 0.01% towards EDLI Scheme 1976.
No separate administrative charges for pension scheme
Inspection Charges:
In respect of exempted establishment under P.F. Scheme employer is liable to pay only inspection charges at the rate of 0.18% of emoluments.
In the case of establishment exempted from EDLI Scheme, the employer is required to pay only inspection charges at the rate of 0.005% of emoluments.
Interest Liability:
For belated remittances of contributions, administrative / inspection charges interest at the rate of 12% on such remittances for the period of delay is to be remitted.
I hope this will be of help to you all.
For further information browse this link:
EPFO <link updated to site home>
With regards,
kumar.s.
From India, Bangalore