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Dear Sir,
I am working as an HR Associate in an engineering industry. My employees are availing the facility of P.F.(12%). One of our employee is asking for his voluntary contribution of p.f. 12%. In this regard please help me to get the below doubts clarified.
1. To what extent of % is the voluntary contribution possible.
2.For eg: If there is possibility of providing 24% from the employee side, should the employer also contribute 24%.
3. If the above points are applicable please guide the terms & conditions along with the forms and formats.
Pl help me in this regard.
With regards,
Dinesh K.T.

From India, Coimbatore

An employee can contribute even 100% of his salary to PF as voluntary contribution. The contribution by the employer shall be restricted to the statutory contribution of 12%. Therefore, if your employee is willing to add a voluntary contribution of 12% over and above the statutory contribution of 12%, you can permit it. You may collect a written consent letter from the employee authorising you to deduct 24% from his salary.

From India, Kannur
Pragnaa HR Compliance Services

Dear Mr. Dinesh,
Employee can contribute towards voluntary PF up to 88% of his BASIC, apart from the normal statutory deductions of 12% of Basic, it is not for the Gross salary.
Employee can't contribute his / her full salary to the PF as per the clause in PoW Act.
In the Payment of Wages Act, the overall deductions should not be more than 50% from the salary. Hence, you also verify the overall deductions amount of the salary if employee wants to contribute.
It is not required that employer has to contribute the equal % of employee's contribution. Employer can contribute only the required statutory % of 12.

From India, Chennai

I would agree with Pragnaa here.
There is no boundation on the employer to match the VPF percentage of employee. Employee can choose his/her portion.
Also, VPF is always calculated as a percentage of Basic and not the gross salary.

From India, Delhi
AG Desai

Employer is not required to contribute more than 12% even if employee contributes more. However, employer has to pay the statutory charges such inspection and administration charges towared the voluntary contribution of employees.
A G Desai
MSPL ltd

From India, Mumbai
Dear All,
Wages under EPF act is Basic wages +DA+ food allowance.
On the above wages one can contribute EPF 12% and same matching amount shall be Contributed by Employer.
In case of VPF up to 20% on PF wages can be contributed and Employer need not pay any contribution on VPF amount except inspection and Administrative Charges.

From India, Hyderabad

1. The PF is calculated based on the Basic Pay.
2. 12% is mandatory from both employee and employer.
3. Voluntary PF (VPF) from the employee is more that 12% and can be till 100% of the Basic (PF 12% + VPF 88%)
4. The employer is mandated to match 12% only - on VPF there is no matching (unless the Employer wants to match it!)

From India, Coimbatore

Dear Sir,
our company facing the EPF pending amount of Rs.near By 4 lakhs this amount shown in form 23 forwarding letter copy , the PF Accounts officer said that you have pay immediately i discuss the same his given oral statement for pending found in EPF Office record beginning 2004-05 to till date.
I asking how i pay this amount?
he told orally you must pay this amount I cannot accept the any new claim settlement.
in the regards kindly give me suggestion.

From India, Madras

Dear Latchiya,
As per my concerned the PF pending amounts are not be shown in Form 23 Covering Letters. Only the adjusting amounts are shown in Form 23 Covering letter. I think there may be wrong calculation or wrong workings made while submitting the Annual Returns. Or excess PF contribution might have been given for the settlements. Get the clarification from the PF Organisation.


It is not known as to how there can be deduction t o the extent of 100% of the wages(basic+DA+retaining allownace) when there are other statutory deductions to be met like ESI,labour welfare fund,professional tax and incometax etc. Apart from this, there is a stipulation in Payment of Wages Act that the total deductions shall not exceed 70% of the wages. No doubt the P.F Act has not stipulated any upper limit on teh rate for volutary contribution , thus technically 100% deduction of the wages towards P.F seem right bu in my view,the same stands limited by the obligations under other laws.The object of compensation and salary is to provide a living to the employee out of it and hence some portion of the wages is to be left to the employee to meet has basic needs..

From India, Mumbai
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