Vp - Operational Excellence
Amith R Murthy
Assistant Manager - Hr
1.If Any employees jumps to cross the limit of PF Ceiling his PF should be deducted up to cieling limit (6500) but definately to be deducted being he is already a member of PF and can't cease to be until leaves the organisation.
2. In case of a new member it depends whether he is declaring his past association with other companies on form no. 11 or not. IF was getting his PF deducted their it will be deducted in new company and if not it may not be deducted. PF inspectors hold the power to cross verify these form 11 in case of non contribution of employees. It is really not mendatory in case of a fresher who is getting basic more than 6500.
3. YEs definately there a lot of companies which are not deducting the PF of said employees.
Hope it serves your purpose.
11th September 2008 From India, Delhi
PF MUST BE DEDUCTED in all criteria mentioned by you.... within limit or above limit, company must have to deduct the p.f. from salary[basic+d.a.].
if you are deducting pf, whose basic salary is above 6500/- you will have to get fill up form- 26(6) with employee's consent and with company's undertaking.
Vishal - 9825224504
11th September 2008 From India, Vadodara
1) If the employee's basic increases beyond Rs.6500/- then the employer have to contribute the minimum amount of Rs.780/-. It is mandatory.
2) On hiring if the basic exceeds 6500/- the PF amount of 780/- has to be deducted if he is aleady a member of PF. Else not required.
3) If the employee joins in the consultant mode then PF does not have to be deducted.
11th September 2008 From India, New Delhi
12th September 2008 From India, New Delhi
It is entirely depends upon the company's policy, that on how much the Principal employer like to contributes towards the PF contribution, can be 12% of the maximum limit of Rs.6500.00 or it can be without any limitations.
Normally the company is depositing flat 12% towards the PF contribution, irrespective of the limitation of Rs.6500.00 nowadays.
Reason for that is as most of the Company has already calculated that amount into the CTC of the employee at the time of salary negotiation.
For e.g. if CTC is Rs.50000.00 per month and the basic is Rs.20000.00 than PF contribution of employee as well as the employer's are included in the CTC (which is Rs. 2400.00 for each @12% of 20000.00), so an amount of Rs.4800.00 is already included the CTC of Rs. 50000.00.
12th September 2008 From India, Delhi
1. Mandatory to continue the contribution in PF.
2. No. If practice is there for PF contibution irrespective of ceiling, one such employee cannot be descriminated.
3. There may be many cos restricting contibuting PF to salary limit Rs.6500/-
12th September 2008 From India, Jaipur
I dont understand what made u say tht option. Once the employee is an existing PF member then u have to pay atleast the minimum amount of 780/- towards PF even if u hire back them with higher basic salary as u suggested.
I can understand that u must be a fresher.
12th September 2008 From India, New Delhi
First of thanks a lot for putting up good post. One point i would like to mention is for any employee for whom you are already contributing more than Rs 780 you can not reduce it back to Rs 780. Apart from this visit to www.epfindia.com for more details.
Friends i needed more clarification about what Mr.Vishal as mentioned i.e about Form 26(6).
And thanks to all others who have replied to this particular post.
12th September 2008 From India, Bangalore
PF deductions over and and Rs.6500/- is the discritionary of the mgt. Once you have taken decision for payment of contributionsover and above Rs.6500, you have to pay PF on the above PF wages and can't stop in the meanwhile. it should uniformly to all the employees. Also in the middle you should not stop/fix a higher limt is also not possible.
12th September 2008 From India, Hyderabad
Opting in , Fixed option or opting out is merely an employee's decision and not employer's.
Hence, when basic increases beyond Rs.6500/-, it is still an employee who has to decide whether to contribute to PF or not.
There are no establishments that have ruled out PF on account of basic beyond Rs.6500/-.
Thanks and Regards
13th September 2008 From India,
There are two different things in PF dedutions as per the discussions.
i) 12% of Basic
My doubts are;
i) Is there any rule or relaxation about the Employer contribution can be fixed ceiling as Rs.780/- to employees who cross 6500/- as Basic;
ii) Is there any strict rule that we should deduct 12% from basic to employees of a new company which is going to introduce PF and all or can we restrict that also as Rs.780/- and
iii) What are all the questions will be encoutered when filing the returns with EPFO office, in case a company restricts its (Employer) contribution as Rs.780/- for those employees who cross Rs.6500/- as Basic and If so, how to defend and overcome with the PF officials?
Kinldy throw more lights on those lines.
13th September 2008 From India, Madras
I am disagree with the saying of Prathima, in this case the employee's contribution will be on the enhance wages (i.e. on 12500.00) till the month of September, he will be exempted from October onwards. For this support I am reproducing the Section 50 of the ESI Act, which will clear the doubts about the same.
50. Wage limit for coverage of employees under the Act
The wage limit for coverage of an employee under sub-clause (b) of clause (9) of section 2 of the Act shall be [Six thousand five hundred] rupees a month:
PROVIDED that an employee whose wages (excluding remuneration for overtime work) exceed [Six thousand five hundred] rupees a month at any time after and not before the beginning of the contribution period, shall continue to be an employee until the end of that period.
13th September 2008 From India, Delhi
13th September 2008 From India, Bangalore
It is not mandatory to deduct PF form any employee's salary if his/her basic wages are more than Rs. 6500/-. As it is specified in the PF Act as "PF must be deducted from the salary of any employee drawing basic wages upto 6500/-.
But if your employer don't want to contribute/deduct PF on employee drawing more than 6500/-, you can get an undertaking in writing from the employee cpncerned regarding non contribution in PF and thus can evade a complex situation arising out of this..
14th September 2008 From India, New Delhi
14th September 2008 From India, Delhi
15th September 2008 From India, Kakinada
1) Law states that PF is mandatory for employees with basic salary limit less than or equal to Rs.6500/- but this cannot be mis-interpreted that employees with greater than Rs.6500/- need no coverage under PF. However, you can leave it to the option of the employee either to contribute upto Rs.6500/- or opt out.
2) On hiring if basic is already more than 6500/- do we need to contribute in PF as mandatory? - It is not mandatory but an option to be left to the decision of the employee.
3) Are any companies are there who are not contributing because the basic is more than 6500/-? - Yes. There are.
But, the best suggestion is not to provide facility to opt out, but to restrict the contribution upto Rs.6500/-. Thanks.
11th October 2012 From India,
pls tell what option is right
1: pf ceiling of 6500 means that pf will be calculated maximum on 6500 means Rs 780 is maximum deduction as per the law employer is obliged too . and above its company wish.
2 pf ceiling of 6500 means that maximum deduction (12%) on basic (whatsoever) is Rs 6500 that is employee share in AC no . 1 although 12 % of basic (deduction) is more than 6500.
27th December 2012 From India, Delhi
28th February 2013 From United Kingdom
The much-awaited minimum monthly pension of Rs.1,000 and a higher wage ceiling of Rs.15,000 for social security schemes run by retirement Fund manager Employees’ Provident Fund Organisation (EPFO) will be implemented from September 1.
The government’s decision to fix pension entitlement of Rs.1,000 under the Employees’ Pension Scheme 1995 (EPFS-95) will immediately benefit 28 lakh pensioners who get less than this amount at present. The move to enhance the minimum wage ceiling for becoming a subscriber of the EPFO to Rs.15,000 a month is expected to bring 50 lakh additional formal sector workers under the ambit of the body.
“The government has notified enhancement of wage ceiling to Rs.15,000 per month, fixed minimum monthly pension at Rs.1,000 under EPS-95 and enhanced the maximum sum assured under the Employees’ Deposit Linked Insurance (EDLI) Scheme to Rs.3 lakh,” EPFO’s Central Provident Fund Commission K. K. Jalan told PTI.
Mr. Jalan said: “Now the maximum sum assured under the EDLI works out to be Rs.3.60 lakh, including 20 per cent ad hoc benefit over the prescribed amount under the notification.” This means that in case an EPFO subscriber dies, his family will be entitled to a maximum sum assured of Rs.3.60 lakh instead of existing Rs.1.56 lakh.
Mr. Jalan said the notification regarding minimum pension, wage ceiling and EDLI would be effected from September 1. Thus all pensioners getting less than Rs 1,000 per month would get at least this much pension from October.
The following may be the impact after the amendment:
1. The employees who have already opted out from PF coverage ( whose basic is above Rs.6500) would be covered under the scheme in case their Basic Wages is higher than Rs.6500 p.m. and upto Rs.15000/- per month.
2. Employees who are exiting PF Members and over a period their basic wages have gone up upto Rs.15000 per month and even above (once member always a member), currently their PF contribution is deducted on a maximum wage limit of Rs, 6500/-, but from now onwards their contribution would be deducted on the actual basic wages upto maximum limit Rs.15000/-p.m.
3. Similarly, the companies who are currently extending PF benefit only on Rs.6500/- irrespective of their wages , may have to increase the PF wages to Rs.15000/- and need to pay the employer contribution of 13.61% on Rs.15000/-
4. The pension amount limit also will increase from Rs.541/- to Rs.1000/-.
5. The employees who current basis wages is less
30th August 2014 From India, Pune
In accordance to wage ceiling increase from 6500 to 15000, request to guide that if PF (12%) is deducting on 5000/- basic salary.
EE Share 12% Rs.600/- + ER EPF share 3.67% Rs.184/- = Total Rs.784/-
ER Share 8.33% Rs.417/- contribution deposited in EPS account.
If now wage ceiling is increased, notification will affect to the above calculation or not ?
2nd September 2014 From India, Mumbai
#AnonymousHi!!! Dear All, Please help me about how i can communicate with my staff about changes in their salary structure due to change in PF Ceiling. please give me any format of letter. Thanks.
9th September 2014 From India, Pune
For PF Deduction The Ceiling Basic Salary Limit Is 6500/-. If Basic Of A Member Employee Increases Beyond Rs. 6500' After His Having Become A Member, Is It Mandatory To Continue Or Can Stop The Contribution In PF?
The Ceiling Basic Salary Limit Is 15000/- new amendment,
You can restrict the pf as per statutory norms and can deduct on 6500 (But present 15000 PM.) If member having continue membership so you should do the same but you cant stop the contribution without employees concern.
you have no need to fill the form- 26(6). When employees want to contribute himself more then 12 % PM then you should mandatory fill the form 26 (6) with employee's consent and company's undertaking.
28th May 2015 From India, Anand