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Doctor Siva Global Hr
Ceo-usd Hr Solutions
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As per the Provisions of Provident Fund Act and Schemes, there are 2 contributions:
- Statutory Contribution in which both Employer and Employee Contributes 12% each. Here it is the prerogative of the employer whether he can restrict to 15K or pay contribution for full PF Wages. Legally no one can question provided he remits PF for 15K for all eligible employees. Here if you bring all employees to the net of full PF Wages for PF Contribution by both Employer and Employee, it will increase the Financial Buren of the employer and also will reduce the take home salary of employees. PF Act does not insist on this also. Hence think several times and then decide on this. Our suggestion is please restrict contribution to 15K only. If it is done it can not be withdrawn later and it becomes very cumbersome in many companies
In case of Voluntary contribution, where in the Employee can contribute over and above 12% any % of contribution to the fund as a saving ( say 12% plus 15%, or 20 % and so on) which he feels comfortable. Here employer is not under any obligation to pay any additional contribution but he will continue to contribute at 12% only.
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Doctor Siva Global HR
From India, Chennai
nanu1953It appears from the original post that few employees are interested to pay VPF and rest are not. It is absolutely accepted under PF ACT & RULES. Employer has nothing to do with this. Employees who will be interested to deposit VPF will authorize Employer in writing for amount of deduction.,
S K Bandyopadhyay ( WB, HOWRAH)
CEO-USD HR SOLUTIONS
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From India, New Delhi
tonmoyduttaThank you so much for a valuable opinion.
From India, Bengaluru