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In some Service Providers companies PF are not deducted from the Gross salary ..pl tell me is this legal or not ? Means if the Salary of one employee is less than 20k per month,o pf is mandatory to deduct and if one's salary per month is above 20k month then pf is not mandatory to deduct. kindly give me the appropriate reply so as to better understand the concept of pf ..
Hello there,
Every company who are registered with shops and establishment act or factories act has to contribute their PF and their employees PF every month(this only applicable for employees count is more than 20) - it is a statuary law.
the current slab of PF is 21,o00 or equal, people whose salary is more than that can voluntarily can apply the PF to continue the service.

But my company is a size of more than 20 employees , recently our MD has decided not to contribute to PF whose salary is more than 20k per month means for the new joiners , but those employees who are already contributing to PF , they cant be dropped in between and continued for the same. And one more thing , my company is associated with the third party to submit the pf and esic challans as earlier there was no HR person ..so is it possible , the company can submit the pf and esic challans by the third party..and if its so , the company is paying extra cost for the same even after having HR person in the company . Means what say u , if i suggest to the company not to associate to the third party for the same , means the company is bearing extra cost upon them even after having the HR person.
Hi Charu,
Actually i have heard that Nowadays in few companies PF-ESI work is handling by accountants or CA's . Some Companies have HR who is handling this work. So i think its management's will or decision from whom they want to get it done.
Regards:-
Veronica Singh
HR

Dear, As above reply, it is management will. There is a small thing of making the pf payment as the salary for 15k, even if it is above 20k. M.Kumar. HR Executive.
If you don’t want contribute towards PF, then you can submit form-11 for all your employees to exempt from PF. Basic limit 15k not 21k, just for your information.
Sampathkumar Sir, please elaborate the use of form 11 Thanks and Regards Gopal Pachimuthu HR Executive
Dear Concerned,
PF will be deduct on basic value. If employee basic is 15500 so pf will be not deduct. we can deduct on same value also but its depend on company. If employee basic is 14900 so pf will be deduct definitely 12%.
Thanks
Nitin Sharma

Basic limit is above 15k , then you can submit form-11 for all your employees to exempt from PF.
Hi Charu,
As per the above discussion, I just need to add one more point that even after the whole payroll and PF things are been handled by the Third Party agencies, then also we need to keep an eye on the same, as I have faced the problem in my last 2 years, the 3rd party agencies neither had proper PF and ESIC number, also he use to submit us fake PF & UAN numbers and ESIC numbers too. We secretly investigated the case directly in PF dept and get to know that almost most of the UAN numbers were fake. Now the problem is the labors dont understand how to handle UAN and how to get access of it, so an HR person, do keep an eye on the agencies, by asking them to submit regularly PF and ESIC challan on monthly basis, also you can check them by your own.
Regards
Jinu Mathews
HR- Executive

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