PF Employer Contribution lower than 12% of basic - is this legal? - CiteHR
Kumaran Praveen
Pk Bhuriya
Sr. Payroll Executive (hr & Admin)
+1 Other

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I am going to join a company and they have stated that they will contribute Rs. 1800 p.m as PF (Employer Contribution), whereas my Basic is 70,000 p.m. Can this be possible under legal terms? Secondly, if the employer contributes only Rs. 1800 p.m, would I also contribute the same amount (Rs. 1800 p.m) or would it be 12% of 70,000 which is Rs. 8,400 p.m. Please clarify.
Hi Buddy,
The amount Rs-18,000 stated by your employer as their PF contribution is right under legal terms reason is for calculating the PF contribution they would take the statutory limit of 15,000 only not your basic of 70,000 pm.
Secondly, Yes you can contribute more than statutory 12% PF contribution from your side but that % of contribution has to be calculated only on 15,000 rs not 70,000 rs.
Example; if you decided to contribute 15% as your contribution than your PF contribution is 15% of 15,000 which is 2250.
With Regards
Mr.Thumbs Up

Thanks Buddy. I guess you meant Rs. 1800 instead if Rs. 18000 in your first line. Am I right? Secondly I’ll contribute only Rs. 1800 towards the PF. So that’s good.
What are the circumstances wherein the employer does not need to set the PF contribution from both the sides? I.e. there is a company wherein 5-8 employees are working. Will it be covered under PF rules?

While going to the office, I met with an accident (my bike got slipped). It was beyond my control as the truck had braked all of a sudden. I got injury on my wrist and knee of right hand. Informed my head just after a few minutes along with the place where the accident happened. I then called my friend as was unable to move the arm for an inch. Went to the doctor, get an x-ray and fortunately, there wasn't any fracture or crack. But bearing a lot of pain in the concerned muscle and bone. My employer was out of country, so I sent him a skype message and got a reply, 'Okay.' The doctor asked me to take rest atleast for a week as it was a injury in the joints. Then, I asked the first reporting person whether I can work from home atleast for a week as directed by the doctor. He agreed and after 4-5 days, I started working from home gradually. Now, it's been total 8 days till when I met with an accident and I got enough recovery that I can rejoin the office.
I am afraid my employer might cut my salary for the days when I haven't worked even from home and also/ or, adjusted my leave balance against these days. What are my rights?

Dear Vvek
PF scheme applies to all companies or establishment, which employs 20 or more than that. Do remember that once the employees’ strength reaches to 20 or more then irrespective of employee strength (whether fall or rise) the company must continue with this scheme. However, suppose company or establishment stopped its operation or continue without any employee then in that case this scheme not applicable. In addition, employee if considered as trainee or apprentice will not be covered under this act.

Hi - I need to know will there be any legal issue from the EPFO department if I choose to reduce the EPFO contribution from 12% basic (basic is more than 15000PM for many employees) to a restricticed minimum controbution of 1800PM (12% of 15000).
We are not reducing the salary (wages) of any employee, we are adjusting the PF contribution to enable them to have a better take home.
Please clarify.
I understand about the clause mentioned in Para 12 as below.
12. Employer not to reduce wages, etc.
No employer in relation to [an establishment] to which any [Scheme or the Insurance Scheme] applies shall, by reason only of his liability for the payment of any contribution to [the Fund or the Insurance Fund] or any charges under this Act or the [Scheme or the Insurance Scheme], reduce, whether directly or indirectly, the wages of any employee to whom the [Scheme or the Insurance Scheme] applies or the total quantum of benefits in the nature of old age pension, gratuity 74[provident fund or life insurance] to which the employee is entitled under the terms of his employment, express or implied.]

Dear sir
Delhi minimum wages is Rs.13896 if any company deduct pf of @12% less then minimum wages Rs.13639 it is possible as per govt rules.please inform me it is possible that any company deduct @12% pf on less then minimum wages.
Pradeep Kumar

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