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In PF we have option for ceiling PF on 6500/- by which employees can get benefit of more net take home salary. If the gross salary is 16,000/- & basic is 5,600/- then on basic 12% would be deducted. And for others whose basic is 6500 or more in that case 12% on 6500 will be deducted.
Hope the problem is clear. Kindly mail if the idea is still not clear on
Sonal Mahajan

From India, Pune
Employer’s cont is divided into two parts as 8.33% of monthly basic salary goes to employee pension scheme subject to maximum 541/- per month and rest 3.67% goes to employer cont. of pf.

From India

Dear Ravi, Every this is correct, but where the matter of Pension fund there is the limit of Rs. 541/- or 8.33% of the basic salary, which ever is less. Rgds/Jitender
From India, New Delhi
Kalyan R


If a person draws more than Rs.6500/-, he is not coverable under the Act. Most of the Engineering companies do not follow this ceiling and liberally contribute to PF as Employer's contribution irrespective of the earnings as a welfare measure. It is purely voluntary and not statutory.

Similarly in IT and ITES companies, the option is given to the employees by the employer.

As you know both employer and employee equally contribute 12% of the basic wages. Out of this 8.33% of employer's contribution goes to Employees Pension Scheme and remaining 3.67% of employer's contribution goes to PF. All the 12% of employees contribution goes to PF Account.

Nowadays the shrewed employees do not want any thing in indirect like gratuity etc as they have to stay for a minimum period of 5 years, which is difficult in today's context. Hence contribution to indirect benefits is loosing it's importance. Moreover the IT companies, ITES and some engineering companies have introduced Flexi Benefit Pay, by which the various components can be decided by the prospective employees.

Please revert to me for any clarification.

Thanks & Regards

Kalyan R


From India, Madras

Hi Regarding PF Deduction, folloing is explanation from my side:
If the Basic Salary and DA is Greater than 6500 then salry for the purpose will be considered to be 6500 and accordingly PF will be deducted.
If the Basic Salary and DA is less than 6500 then PF will be deducted on actual salary.
Again if the PF of any organization is managed by i.e. independently then depending upon the policy laid down by the company PF can be deducted on actual basic i.e. on basic higher than 6500.
Explanation: if Basic and DA is 10000 then PF will be deducted on 10000 only. But for EPS salary will be considered to be 6500 only.
If your query is solved then its Ok else you can post your query again

Pankaj Sharma Jaipur

Dear Friend,
The following information about PF & ESI may be conducvie to you.
Employee contribution 12%
Employer contribution 13.61% (Ceiling basic prise Rs.6500)
A/c No.01 - Basic 12% (Employee) + Basic 3.67% (Employer) = 15.67% goes into Employee's PF a/c
A/c No.02 - 1.10% admn charges of PF department (Paid by employer)
A/c No. 10 - 8.33% (Employer) goes into Pension Scheme
A/c No.21 - 0.50% EDLI (admn. charges of PF department)
A/c NO.22 - 0.01% admn charges of PF department (Paid by employer)
PF contirubiton is submitted before 15th of every month thru challan in bank
Employee contribution 1.75%
Employer contribuiton 4.75%
Total 6.50%

ESI contribution is submitted before 20th of every month thru challan in bank
Pankaj Sharma

From India, Chandigarh
Dear all,
Kindly help me in these queries.
a} A person worked for 15 months in an ITES Co., and now is out of work since past 8 months. He withdrew his PF during this time and is about to join another organisation.If he got his 12% and Co.'s 3.67%. how will he get the remaining 8.33% and when ?
b} If an executive's inhand salary is 19500/-, what should be the breakdown,i.e. Basic? House Rent allowance? Variavle allowance ?
etc,.......Is there some rule regarding this breakdown or it can vary frm
Co. to Co.,.....Such an employee can opt out of PF.. ? Please explain.

Thanks and Regards.

when an employee will get the pension amt i hope he has to serve the co. for atleast an year then only he can get his pension amt is that rite ? pls clear my doubt.. Advanced wishes M.Bharath


Dear Neeraj,
Explanation for Point a:
8.33% is non withdrawable. He cannot withdraw that amount. This percentage goes towards EPS (Employee Pension Scheme). He will get this amount back as monthly pension on completion on 58 years i.e. on superannuation. For more clarification you can call me on 9831000509.
Explanation for Point b:
Every company has its unique salary structure. So if his in hand salary is 19500, it cannot be said what can be the individual breakup. Regarding HRA normally it is 40% or 50% of Basic+DA. its not a thumb rule, it can still vary from company to company
Dear M Bharat,
Pensionalbe service is a continuous service of 10 years. Only then an employee can be eligible for pension. But here the catch is that he will get pension only on superannuation or after 50 years of age at a reduced amount. For any clarification you can also call me at the above mentioned address.
Dear Pankaj, your explanation is really great

Thanks Neeraj It Stands Clear .... only thing in that how and where to withdraw the Amt and wats the Form no. to fill to get the pention Amt? Once again Thank u Neeraj

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