Understanding PF Deductions: What's the Maximum Amount That Can Be Taken from Your Salary?

Dear All,

Please tell me the maximum amount of PF that can be deducted from the employee's salary. I know it's 12% of Basic, but what's the maximum amount?

Regards,
Pooja

Dear Member,

Some establishments contribute a maximum of Rs. 780/- per employee per month as PF contribution.

Regards,
paddutr

Hi Pooja,

The maximum amount of PF deduction from the employer's side is Rs. 780/- {6500 (Basic pay) / 12% = 780}.

Thanks,
Jyoti Negi

It can be on actual Basic and DA, or Co can opt for 12% of 6500. Left to Management.

Dr. Sandeep Zonal HR Manager (South) DTDC Cargo and Courier 09379057297

Dear Pooja,

I want to ask, I am working in a hotel and paying more than 780/- as PF per month because our basic is high. So what's the logic?

Regards,
Pooja

Dear all,

Please tell me the maximum amount of PF that can be deducted from an employee's salary?

Employer, you can deduct a maximum of 12% of basic salary. If any employee wishes to contribute extra (employee's contribution), the employee can provide a declaration and request the employer for a higher contribution from the employee's side. For example, an employee can authorize the employer to deduct 20% of the basic salary. However, no interest is payable on the extra contribution.

The answer lies in your query only.

The basic salary of your employees may be higher than Rs. 6500/-, and your employer might be paying the PF contribution on actual basic salary.

Regards,
Manoj

Hi All,

If the employee's gross salary is Rs. 10,000, what should be the minimum PF amount to be paid? Kindly post your views.

Regards,
Murali G.

Dear Pooja and others,

If an employee draws basic+DA more than Rs. 6500.00 per month, then it's the employee's wish to remit PF contribution on the excess/higher salary, which would be 50% of Basic. Similarly, the employer has an obligation on Rs. 6500.00 only. However, if the employer also wishes to pay the contribution on the excess (higher salary).

Dear Pooja,

There is no maximum amount of PF as such. It all depends upon the company management. In our company, we are contributing up to 7500. But it should be 12% of basic.

Cheers,
Vikas

Dear Pooja & Friends,

Sorry for my comment, "You all have to read the PF Act and then reply."

As per the PF Act, an employee whose basic + DA is up to Rs 6500 per month, the PF calculation would be 12% of the actual amount.

If an employee is receiving more than Rs 6500 as Basic + DA, in this case, both parties have to agree upon PF deduction on Basic + DA (whatever the amount may be). It means the employer and the employee are ready for the PF contribution. If either the employer or the employee is not willing to make contributions above the limit of Rs 6500, then the PF will only be deducted on Rs 6500.

As you are aware, under this Act, two schemes are in operation: Provident Fund and Pension Scheme. The employer's contribution is divided into two parts. The first part is for the Pension Fund, with an upper limit of Rs 6500 (Basic + DA) and a contribution rate of 8.33%. The second part, which is the remainder of the total contribution (12%), goes to the Provident Fund.

In the present scenario, almost all companies are operating on the CTC concept, where both contributions are included in your Total Package.

I hope I have cleared your doubts.

AMATYA

Employee's deduction as per PF Act is 12% on up to Rs 6500 Basic+DA. However, in many organizations such as mine, the deduction for all employees, including MD's salary, is 12% of Basic (beyond Rs 6500) and the same is contributed by the Employer/Organization.

Hi,

PF deduction is 12% of the basic salary.

The limit for PF on the basic salary is Rs. 6500/-, but if an employee's basic salary is more than Rs. 6500, it is at the management's discretion whether to deduct 12% of the actual basic salary or 12% of Rs. 6500/- while adhering to the limit, or to exclude the employee from the PF contribution if the basic salary exceeds Rs. 6500 per month. Whatever amount the employee contributes to PF, the employer must match the contribution.

Bye,
Usha

As far as my knowledge goes, an employee can contribute up to 100% of Basic + DA towards PF. However, the employer's maximum contribution is 12% of Basic + DA.

Dear Pooja,

There are two methods of deducting PF. The first one is the standard method in which the maximum amount of PF deduction is 12% of the basic up to 6500/- (most companies follow this). However, the other method suggests that an employee can contribute up to 50% of the basic amount to the PF (followed by some companies).

Hope this information satisfies your query.

Regards,

Pankaj Chandan

Dear All,

Please tell me the maximum amount of PF that can be deducted from an employee's salary. Although I know it's 12% of the Basic, what is the maximum amount?

Regards,
Pooja

Dear Member,

The maximum amount in PF from the employee's side may be up to 20% of basic, but the employer's liability is only 12% of basic or ₹780, whichever is less. Employees will earn the same rate of interest on the excess contribution as well.

Any further suggestions on this matter will be appreciated.

Regards,
Devender Kr. Sharma

Contribution for an employee who worked for 5 days in a month, and his basic wage is $2800 + $555 :icon10:

Dear Pooja,

Well defined by Amatya, PF contribution is made at 12% of Basic and DA from both the employee as well as the employer side. Out of the employer's contribution, 8.33% goes to the pension and the remaining 3.67% goes to the Provident Fund. The maximum ceiling is a basic of 6500/-, after which, if an employee wishes to be exempted from the PF contribution, it can be done with mutual consent between both parties. The employee needs to express this in writing. Even with mutual consent, the company may adhere to a maximum contribution of rupees 780/- only.

Regards,

Amit Seth.

Dear Pankaj,

There are two methods of deducting PF. The first one is the standard method in which the maximum amount of PF deduction is 12% of the basic salary, up to 6500/- (followed by most companies). The other method allows an employee to contribute up to 50% of the basic salary to the PF (adopted by some companies).

Hope this clarifies things for you.

Regards,
Gajraj

Hi all,

I don't know what the actual situation is in India regarding the Provident Fund (P.Fund), but in Pakistan, it is clear that the P.Fund contribution is 8.33% of the basic pay, and the employer also contributes the same amount to the P.Fund account.

So, if the basic pay is Rs. 6500 per month, then the deduction for P.Fund contribution will be as follows:
- Employee Contribution: 6500 * 8.33% = Rs. 541.45
- Employer Contribution: Rs. 541.45

As the basic pay increases, the P.Fund contribution will automatically increase in the same ratio. I believe that there is no maximum limit for the Provident Fund; it depends on the company size and its policies. Some companies provide both the Provident Fund and Gratuity benefits.

Thank you.

Hi All,

I am new to this forum. I am working as Head Specialization-HR (Faculty) in a Management College in Pune. I would like to work as a freelancer in recruitment so that after gaining some experience, I may shift to the industry. Can anyone please suggest how to go about this?

Regards,

Dear HR Gurus,

Can you clarify the doubt about FOREIGN NATIONS PF deduction?

Q: In my company, there is a foreigner working as a CBD. Is he eligible for PF? Is there any specific law for foreigners mentioned in the PF Act? If so, could you provide the latest amendments? The maximum PF deduction in my company is Rs. 780/-.

Please send your reply to this email address: gowriprasad.k@imisoft.com

Best Regards,

Gowri Prasad.K

Hi,

I'll tell you based on my knowledge. It is in 2 types. The maximum amount was decided by the company. They may take 6500 basic mix. 6500 * 12% or basic * 12% (whatever the basic).

1) The maximum amount of PF deduction from the employer's side is Rs. 780 {6500 (Basic pay) / 12% = 780}, and the equal amount is deducted from the employee's side. The total is 780 + 780 = 1560.

2) The second one is basic * 12%. Maybe your company follows basic * 12%.

Goodbye,
Vishnu.

Maximum PF can be deducted at 12% from the employer on Basic and DA. However, if the employer wishes to apply the deduction on the ceiling amount, it will be calculated on Rs. 6500/-, i.e., Rs. 780 per month. On the other hand, the employee can deduct their share as much as they desire as VPF.

The calculation is as follows: In EPF, the employer's share is 3.67%, and the employee's share is 12%. For Pension, the employer's share is 8.33%. The employer has the option to choose the ceiling amount of Rs. 6500/- for the deduction.

Thank you,
Pramod
9833722600

Hi,

There are no specific limits mentioned, but from the employer's side, when you bifurcate the 12% into 3.67% as employer's PF and 8.33% as employer's pension, if the basic amount is more than 6500, then you need to transfer 541 to the pension fund and the remaining amount to the PF.

Hope this clarifies your doubts.

Aasif J Sheikh.

Statutory deduction is 12% from the employee, but the employee has an option to contribute voluntarily to any extent (without affecting his take-home pay) nearly 24% or more - whereas the company contribution is restricted to 12%. In this case, you have to obtain a letter from such an employee informing the PF Commissioner through the management under a copy to the management.

Hello, currently, my basic salary is 8500/-, and my company does not allow deductions for PF due to the higher basic salary. Can someone please explain the exact process?

Regards,
Ashok G.

PF Deduction Details

PF deduction is based on Basic and DA, and the ceiling amount is Rs. 6500/- at 12%. With the new amendment, PF will be deducted on Basic Plus DA and all other allowances except conveyance. (The bill is yet to be passed.) If a company wants, they can deduct PF on the total Basic and DA amount at 12%. Additionally, if an employee wishes, they can opt for a 12% VPF deduction at 12% from Basic and DA.

Thanks.
Pramod Pandey