Can We Set a Fixed PF Slab of Rs. 600 for Employees Earning Up to Rs. 10,000? Seeking Advice!

Hi Friends,

Can PF slab be fixed at Rs. 600 for employees with a salary range of up to Rs. 10,000 per month, whereas the basic salary is below Rs. 6,500? Generally, for higher salary ranges, the company may keep this slab at Rs. 780.

I need these details as we are planning to standardize the salary structure in our company. I request all members to kindly advise on the above.

Many Thanks & Regards,
Mahesh K Prasad

I am not sure about this, but generally, we have a rule that is 12% of the basic. Just check with some more seniors and post it here.

Regards,
Anup Abraham

Dr. Mahesh,

No, you can't fix a slab of Rs. 600/- because PF is 12% of the actual basic. But if the basic is above Rs. 6500/-, then you can fix Rs. 780/- as the PF slab because Rs. 6500/- is the maximum applicable limit of PF contribution. If it is less than Rs. 6500/-, then you have to pay 12% of the actual basic.

Thanks,
Kumaran Siva

Hi Sir,

If you can set a slab of Rs 780 for the basic above 6500, why is my PF getting deducted more than Rs 780 then? Or is it that the PF can be deducted at 12% of the basic all the time unless the employee wants a slab to be kept? For example, if my basic is Rs 28,000, my PF deduction will be above Rs 3,300, but can I request to keep it at Rs 780?

Please explain!

Hi All,

PF, as said above, can be fixed at 780/- for the Basic+DA = 6500/- and more. However, in case any person is willing to deduct more than that amount, they can do so. The employer's contribution does not necessarily increase. If I am wrong, please let me know.

So I guess the reason your PF deduction is more than 780/-.

Sandeep K.

Dear Anup,

Let me clarify your point: your company is deducting 12% of your actual basic salary, which is your company policy. However, this deduction is not against PF rules because whatever deduction they make will be deposited into your PF account. It is important to note that it is not necessary to deduct 12% from the actual basic salary; it is sufficient to deduct 12% from Rs. 6500, which is the PF limit as per PF law. Many companies deduct 12% from the actual basic salary according to their own policies. It would be advisable for management to consider whether employees prefer deductions from the actual basic salary or Rs. 6500 (contribution Rs. 780).

If you need any further clarification, please feel free to contact me at my email id: kumar_siva02@yahoo.co.in.

Thanks,
Kumaran Siva

Dear Mr. Siva,

I understand your point. I am aware that the amount is going to my PF account; however, I was still uncertain if I could request to reduce it to $780 and transfer the remaining to any of my other allowances.

There is one more aspect that is unclear. The company also contributes equally to the PF, meaning they are contributing a similar amount every month towards my account, for example, $3300 from me and $3300 from the company. Am I correct?

If I request my company to reduce my contribution, will it affect the company's contribution to the PF? For instance, $780 from me and $3300 from the company. Is this a possibility?

Thank you.

Dear Anup,

I am not sure whether your company is also contributing the same amount (Rs.3300/-) because it is up to the management to pay on actual basic or basic limit (Rs.780/-). But as per PF rule, the management can't reduce the amount; they can only increase the amount. So, now they can't change the contribution even if you are willing.

Thanks,
Kumaran Siva

Your corrected text with proper paragraph formatting:

My basic is 2500 pm, and my monthly salary is a net pay of 7000 pm. In my salary slip, they have not deducted any PF amount or ESI; they have deducted only Professional Tax. I don't have any PF number. I am planning to leave the company. Will it be okay when I join a new company by saying that I don't have a PF account?

PF is restricted to Rs. 6,500 only. An employer is bound to pay 12% of the basic salary of any employee, which amounts to Rs. 780.

I have recently joined a 3-year-old organization registered under the Bombay Shops and Establishment Act and under DIC. The organization does not have any fixed set of rules in HR, and there is no fixed percentage of calculations in the salary structure.

Major Problems Faced

1. There is no PF account of the employer, so should the organization have PF deduction in the salary structure?
2. Please provide components for the salary structure and their respective percentages.
3. How much professional tax should be deducted, and what are the different slabs for doing so?
4. Number of leaves per year and their bifurcation.
5. How to calculate the amount to be deducted for unpaid leave.

I hope this helps! Let me know if you need further assistance.