Boss2966
Industrial Relations
JAWEDALAM
Ir & Contract Labour Management
Kalijanni
Sr. Manager-hr &ir
Hrkpati
Sr.manager Hr & Legal
[email protected]
Admin & Compliance
Shah01ankita
Talent Acquisition / Consultant - Catalis
Saunee
Hr Manager
+5 Others

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A contract for hiring of manpower is done with my company and contractor.
Contractor is paying salary to his employees and my company is reimbursing the same with employer PF and commission on wages.
THE BASIC WAGES OF HIS EMPLOYEE IS RS. 7254/- AND HE IS DEDUCTING RS. 870/- ON ACCOUNT OF PF.
but he is depositing PF Amount to PF Department is Rs. 780/- only. (Limited to 12% of 6500/-).
Kindly suggest if he is doing wrong practice or there is any rule for deduction of PF not more than Rs.780/- that is 12% of Rs.6500/-

From India, Bhopal
Dear Lokesh
Above Rs. 6,500/- (if Rs. 6,500/- is 60% of their total Salary) are not eligible for PF. Employer need not go for PF for those employees.At Higher side if 12% on 6500/- PF isRs. 780/- . Then Employes contribution on all heads i.e.EPS,EPF,EDLI, Admin Expness. etc. put to gether will Rs. 884.65 only.
correcrt me if am wrong.
Hrkpati

From India, Guwahati
As per the PF Act,
The company is covered under it if it has 20+ employees.
Even if the employment in such covered companies falls below 20 at any give point of time, the company continues to be covered under the act and continues to contribute.
Similarly,
if the employee has a basic of less than 6500 during his joining, he becomes covered under PF Act
Even if his basic rises above 6500, he continues to be covered under the Act and continues to contribute (min of 12% of 6500 which amounts to 780 pm)
For your query lokesh -
If the employee was covered under the act, he'd continue to do so.
Both - the company and the employee - will contribute minimum 12% of 6500 (780/-) towards PF act.
Some companies do contribute 12% of actual basic which is 870 in your case. However, whatever amount is deducted from your salary, or is reflected in the salary slip ought to be deposited in the PF account.
Seniors kindly reflect.

From India, Mumbai
Dear Lokesh
Deduction PF from wages and not depositing to authorities is crime .
EPF is eligible who's basic wages are less than Rs.6500/-
and who's basic wages are above the Rs.6500/- and EPF restricted up to Rs.6500/-
Above Rs.6500/- EPF deduction is purely decision of employer.
many employers are shown EPF as CTC, hence they are deducted and deposited to EPF authorities.
Above Rs.6500/- which is deducted EPF the employer contribution is need not to add. we can treat that is VPF. if he deducted from wages and not deposited to authorities is crime. call the contractor and explain the same
V K Rao

From India, Guntur
As per law employer is bound to pay 12% of 6500(in case salary is above 6500),however at his own will employer can contribute on any amount more than 6500. Also if he showing deposit more than on 6500, he is bound to contribute that amount.
From India, Tirupur
That is what most of the contractors do (no offense to those who are generous and honest to their employees). that is another way to save money. what they do generally, they take volunteer PF from employers (on actual basic) and deposit the EPF calculated on maximum cap of Basic salary. they also make different compliance sheets for employer and the PF department.
have seen come companies doing so. might be your contractor also doing that, but neither it is legal nor ethical towards an employee.
Thanks!
Saunee

From India, New Delhi
Dear Lokesh,
If Contractor is deducting amount of Rs 870 than he should submit the same amount in PF department in my opinion you should fight for the right of employees and for compliance and you should registered complaint against him if he is not doing so.
I am also fighting for the same and i have seen many of contractor who dont submit the PF amount but they deduct from employee.
https://www.citehr.com/471927-proble...-resource.html
Regards
Kashyap

From India, Chandigarh
The PF rate 12% is only minimum. Employee can credit more than this. But employer contribution is restricted to 12% only in practice as paying more than 12% towards PF to employees will not give any exemption to the employees or employers under various provisions of Income Tax Act. Not withstanding this provision, if the amount recovered from the employee is more than the stipulated 12% then that amount should be invariably remitted to the employee's PF Account. However the employer could restrict to 12% only and he need not credit the amount recovered from the employee towards PF - Pls correct me if I am wrong
M J P DEVADOSS
Regards
M J P DEVADOSS

From India, Madurai
Dear all , if an employees basic & da exceeds rs.6500 then is he exempted from pf deduction? Regards ajay
From India, Kaiga
Dear Ajay,
An employee is covered under PF Act when his basic + DA (during the 1st job) was less than or equal to 6500.
If after a period of time (in the same job or during the job change) if the employee's salary is revised and so his basic + da is revised upwards crossing 6500, still the person continues to be covered under the PF Act (unless he is employed by a company which is not covered under PF act)
He continues to be covered until retirement / death / as explained above scenario.
I hope this clarifies your doubt.

From India, Mumbai

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