Project Trainee Hr
C.e.o. & Hr Consultant
Regarding PF Contribution -Employer should pay 12% of Basic salary, in which 8.33% will goes to Pension Scheme balance 3.67 will goes to PF.
While calculating the Pension Scheme employer should pay 8.33% of basic (limit is upto Rs.6500/ ie Rs.541/-) not more than that rest will goes to PF.
say for eg. if the employees is getting Basic salary of Rs.8000/- Rs.541/-(8.33%) will goes to pension scheme and Rs.419/- will goes to PF, however employer has to contribute 12% of basic, whatever be the amount.
Regarding Employee Contirbution of 12% from basic is unavoidable as per the PF act.
Please go thru ppt. for more details.
18th October 2005 From India, Madras
Under the EPF & MP act,1952 to become eligible for membership , it is defined that salary of person should not exceed Rs.6500.00 per month. But this is applicable when a person is joining the EPF scheme for the first time in career. If your company has enrolled all the employees irrespective of their salary then this is known as volutary enrolment towards the EPF scheme.
As you apprised EPF Contributions has also been deducted on full salary and same amount has been contributed by the employer towards EPF. Contributions beyond statutory limit of Rs.6500.00 are known as voluntary contributions.This is also allowed under the scheme.
But this voluntary contributions beyond salary of Rs.6500.00 needs to be intimated to concerned Regional Provident Fund Commissioner office.
Now ,If, you have already intimated the concerned authority in this regard then for restricting the contributions ( Employee & Employer) to salary of Rs.6500.00 which is also allowed , please send revised intimation in this regard for withdrawal of voluntary contributions.
As far as dicontinuation of deductions is not permissible under the act. Once a member of scheme either normally or through voluntary means, will remain member of the scheme irrespective of salary. The contributions can be restricted upto salary of Rs.6500.00 per month( Limit which is currently applicable).
I hope this is clear that contributions can be restricted upto a salary of Rs.6500.00 but under no circumstances can be discontinued while the member is still in service.
18th October 2005 From India, New Delhi
ITS AN AMAZIN PPT,I REALLY LIKED & IT HELPED ME A LOT.M A FRESHER RECENTLY JOINED AN ORGANISATION IN HR,IVE TO HANDLE PF,GRATUITY,INSURANCE SO THIS PPT WAS VERY HELPFUL TO ME.
SIR,IF U DNT MIND CAN I ASK QUESTION WHICH I'VE NOT UNDERSTOOD IN D PPT.PLS MAIL ME URE EMAIL ID.
THANKX A LOT
19th February 2007
You have raised a good question here. The only problem with PF is you can't roll back once employee is enrolled in the scheme. It would be legal complications. In this case it is better if you can take advice from PF consultant or authority.
19th February 2007 From India, Delhi
Please throw some light on this.
11th June 2008 From India, Delhi
If your organization has been paying contribution on the full basic salary then it has to continue with that. Once a statutory benefit offered to an employee, cannot be reduced during the continuation of his/her service. It will have serious legal implications.
However, for new joinees you may choose to contribute on ly upto baisc of Rs 6500. Also, any contribution made over and above Rs 6500 is NOT a Voluntary PF if the similar amount has been contributed by the employer as well.
Any organization once covered under purview of EPF act, MUST equally contribute towards the PF of an employees.
VPF is Voluntary PF which an employee opts for, wherein employer do not contribute towards it.
Hope this would clarify..Probably my response would confuse you as to which response is correct..You may check with some other senior guys as well for your satisfaction. However, just FYI..I lead the HR ops team for my organization and has more than 8 yrs of exp.
12th June 2008 From India, Mumbai
Thanks for sharing knowledge .I have a question on PF that what will happen when the employee exceeds his basic pay more than Rs 6500/- for e.g. Rs 8000. In this case is that mandatory for employee to contribute 12% of Rs 8000(basic) or is there is some option where he can stick up to Rs 6500 only.
19th February 2009 From India, Bangalore