Confused About EPF Salary Limit? Seeking Clarity on Recent Reports

Recently, an article in the Economic Times reported that employees with a basic salary under Rs 7500 are covered under EPF. This limit was increased back in 2005. However, I could not find any other confirmation of this news, as everywhere it is still mentioned as Rs 6500. Does anyone have clarification on this? Please confirm.

Rajesh Dalmia

Hi,

Applicability of the Act & Scheme

Is extended in area-wise to factories using power and employing 10 or more persons and to non-power using manufacturing units and establishments employing 20 or more persons up to Rs. 7500 per month w.e.f. 1.4.2004. It has also been extended upon shops, hotels, restaurants, road motor transport undertakings, equipment maintenance staff in hospitals.

Thanks
sree

Hi,

The document has not been revised yet. If you have any background information, please provide details. The current amount stands at Rs. 6500/- and is still ongoing.

The Government and PF department have not given any approval or issued any notifications. Please do not worry.

Thanks,
Manoj Kumar

Hi Sree,

Your information is correct, but that does not pertain to EPF; it falls under the ESI Act. However, that also changed in October 2007 from Rs. 7500.00 to Rs. 10,000.00. Please make sure.

Regards,

Ravi Kumar T
09964519065

The limit is 6500/-, and we have not received any updates on the same from the consultants.

Hi Rajesh Dalmia and Shrihariarjun,

Can you please refer to some official notifications or give more details about the source of the information you have?

- Hiten Parekh

Sriharirajun's observation was about ESI and not EPF. The wage limit for ESI was raised with effect from 1-4-04, from Rs. 6500 to Rs. 7500. The ceiling was raised again from Rs. 7500 to Rs. 10000 with effect from 1-10-2006. Since 1-4-04, the applicability of ESI was extended to shops and establishments. For EPF, the salary ceiling still remains at Rs. 6500.

Regards,

Madhu.T.K

No, till date, it has not been revised, and the ceiling is still 6500. This is the limit for PF calculation only.

Hi friends,

Without any notifications and amendments passed in the parliament, which are to be published in the gazette, it is not possible to implement the new ceiling limits. Therefore, reports in the newspaper cannot be the basis of it.

Regards

Dear Dalmia,

There is no circular regarding this matter. Since this is only a proposal before the government, you can continue with a basic salary of 6500.

Regards,
Athmarama Shetty

Rajesh Dalmia,

Hey Rajesh, it's certainly nice of you to keep yourself abreast of the recent happenings around and sensitizing us on this.

As of now, the limit is Rs. 6500/-; however, a bill is raised to extend it to Rs. 7500/- in the parliament, which is not yet approved. I got this clarified from my close friend in RPFO.

Kind Regards, Jagdish

Most of the members are right. It is Rs 6500 per month; there have been no changes to this amount till date.

N. N. Tiwari

Here is the corrected version with proper spelling, grammar, and formatting:

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Here is the link to the article that has the reference to the EPF limit.

Wage ceiling for Employees Provident Fund may go - Finance-Economy-News-The Economic Times

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Hi,

Official notification has not been received about the hike. As of now, for PF ceiling, (Basic + DA) continues to be at Rs. 6500/- only.

Chandru
Chennai

Hi,

The ceiling limit for basic pay to deduct EPF for employer contribution is still Rs. 6500, and there is no limit for the employee to contribute to EPF.

Thanks and regards,
SPS

Greetings,

Recently, we had a PF official visiting our office for an audit, and he conveyed that the limit is Rs 6500/-. If anyone can share any articles or publications on the same from the government, it would be of great help to all of us in this forum.

Regards,
Patel

Employer contribution to PF is a total of 12% split into 8.33% for the Family Pension Scheme and the balance to the Employees' Provident Fund. The ceiling amount of FPS contribution is 541 (6500*8.33% = 541). The calculation specimen is as follows:

Wages Rs. 5000
Employer contribution to FPS = 417 (5000*8.33% - rounded to the nearest rupee)
Employer contribution to EPF = 183 (5000*12% = 600 less FPS contribution 417)

Wages Rs. 6500
Employer contribution to FPS = 541 (6500*8.33% - rounded to the nearest rupee)
Employer contribution to EPF = 239 (6500*12% = 780 less FPS contribution 541)

No, I think it's still 6500/- only. If it increases, then we would get some message from the PF Department. As such, we didn't get any message from them as of now.

Thanks,
KP

It has not increased to Rs. 7,500/-. Till date, it is only Rs 6,500/-. However, EPFO is planning to increase the ceiling up to Rs. 7,500/-.

Hi Dalmia, This may clear your doubt. With the aim of widening the base of those eligible for provident fund from the current four crore-odd subscribers, the government is mulling doing away completely with the employee wage ceiling of Rs 7,500 per month. At present, employees with salary of Rs 7,500 are covered under the Employees Provident Fund and Miscellaneous Provisions Act. EPFO commissioner A Vishwanathan told ET, “The proposal may come up for discussion in the next board meeting.” The implementation of this proposal may require an amendment to the Employees Provident Fund and Miscellaneous Provisions Act. While eligibility for the Employees State Insurance Act is now already set at Rs 10,000 per month from the earlier Rs 7,500 per month, recent amendments to the Payment of Bonus Act has also facilitated a rise in the eligibility limit for bonus payment from Rs 3,500 per month to Rs 10,000 per month. Regs, Nithya P Corporate HR

Dear all,

Can anyone provide me with supporting documents on the revision of the PF ceiling?

Regards,
Praveen

Dear Venkat,

There is no limit for an employee to contribute, and as such, an employee can make a voluntary higher contribution, i.e., more than the statutory limit of 12%. However, the employer need not match this higher contribution; the employer's contribution can remain at the prescribed 12% as per the Act. Usually, employees choose to contribute voluntarily because it serves as a form of savings directly and provides income tax benefits.

Regards,

Madhu.T.K

Recently, an article in the Economic Times reported that employees with a basic salary under Rs 7500 are covered under EPF. This limit was raised back in 2005. However, I could not find any other confirmation of this news, as everywhere else it is still mentioned as Rs 6500. Does anyone have clarification on this? Please confirm.

Rajesh Dalmia

Hey, this is not true in my organization. We have a PF consultant, and I have checked with him as well, and he said it is not true.

Amol Agaskar
HR Executive
TUV SUD South Asia

The PF limit is ₹6,500 only, and there is no change to date. For employees whose wages are up to this limit, it is mandatory; otherwise, it is optional. Additionally, the management is not obliged to pay the employer's contribution of 12% beyond this limit. For instance, if an employee is earning ₹8,000, the employer is only required to pay 12% of ₹6,500.

I have heard about a new amendment in ESIC for pregnant women. However, I don't know the details. Can anyone tell me about it?

Hi,

We are employing quite a number of contract laborers through different agencies. Can you please guide me on whether we can fulfill all our shop floor workmen requirements on fixed-term contracts? If so, what would be the maximum time period we can engage them for on a fixed-term basis? I understand that they are to be paid equally in comparison to other regular workers of the organization, including benefits such as leaves, etc. Please provide guidance to help me proceed with this arrangement.

Balakrishnan

Members, why waste time on these posts? Anyone can visit the website of EPFOrganization and access the details. It states that an employee, upon joining the employment and receiving wages up to Rs. 6500/-, is required to become a member. Now, an employee is eligible for membership from the first day of joining the covered establishment.

Gopan

To my knowledge, for PF, it is still Rs. 6,500/-. I am a regular reader of The Times of India & LLR. There is no update in this regard that the limit has been raised to Rs. 7,500/- per month. If anyone has a copy of the amendment, please post it on the citehr. Regards, Vikram Singh

Dear Friends,

There is no limit for the basic contribution towards PF (Provident Fund). If the company wishes to contribute, it can contribute more than that. However, there is a limit for the contribution towards employees' pension fund, i.e., 6500/-. We can contribute towards the pension fund only to an extent of 6500 (8.33% of 6500 which comes to Rs. 541/-).

Hi,

Yes, dear, if we have not received any information from government agencies/government bodies, we can't deduct PF more than Rs. 6,500/-. Currently, we are deducting a maximum of Rs. 780/- per month @ 12% on Rs. 6,500/- only. I don't think there is any confusion; if you have any queries, please visit RPF.com.

Manoj Kumar
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It is Rs. 6500/- and EPF would be 12% of the same, viz. Rs. 780/-. This is the minimum contribution, and the maximum can go up to much more. One can have an option to contribute the minimum of Rs. 780 per month or also as 12% of the basic salary, which could be much more. It could go up to Rs. 30,000 to 40,000 for higher salaries.

Dear Friends,

In the article, I had tried to contact the Economic Times head office (H.O.) in Delhi and conveyed to them about the mistake in publication. They said they would cross-check at their end and inform us. However, to date, they have not done so. For the information of our friends, this was incorrect.

According to our statutory auditors, in terms of the EPF Rules, in cases where employees are drawing more than Rs 6500 per month and do not opt for the PF Scheme, a declaration in the prescribed form has to be obtained from the employees.

Kindly ensure compliance before this month-end to avoid audit qualifications. As per my F&A Manager, who is a qualified CA, is there any prescribed format for the same? Can somebody upload the same ASAP or mail me at dipakmalik(at)gmail.com.

The ESI limit has also been amended to ₹15,000/- with effect from May '10. Please note it.

It is also to inform you that there is no official communication from PF Authorities regarding the enhancement of the EPF ceiling from ₹6,500/- to ₹7,500/-.

Regards,
Ram