Madhu.T.K
Industrial Relations And Labour Laws

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Can anyone of you explain me why we calculate PF contribution on 15000/- only though the salary of the employee is 21000/-. Why we are not calculating it on 21000/-.
As per Provident Fund rules, there is a ceiling in monthly salary and that is Rs 15000. Any employee whose salary at the time of joining is more than Rs 15000 is not expected to be a member of EPF. However, it is not mandatory that he should be excluded. Similarly, the employer's are under an obligation to contribute 12% of the salary. But since there is a salary ceiling of Rs 15000, they are not legally liable to contribute 12% on the actual salary, ie, salary above Rs 15000. Their liability is limited to 12% of Rs 15000 only. That is why your employer is restricting his share of contribution to 12% of Rs 15000 even though you get Rs 21000 as salary.
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