Is Provident Fund Mandatory for Companies with 25 Employees Earning $8,000-$10,000?

I want to know if giving PF is mandatory. We have 25 employees, all drawing around $8,000-$10,000 in salary. Do we have to apply for PF, and if so, how much do we need to pay from the employer and employee sides?

If your establishment employs 25 (20 or more) employees, your establishment will be covered by EPF. You have to register your establishment for PF. However, since all employees are paid a salary of more than Rs 6500, no employee will be covered. Please ensure that your Office Attender(s) and Sweeper, who are on your payroll, are also receiving a salary above Rs 6500.

Regards,
Madhu.T.K

Dear Sameer,

As you inform employees that the number is more than 25, your organization will come under the PF. Now, you have to register under the PF act, and PF will be calculated on Basic+DA. If Basic+DA exceeds 6500/, the excess amount will be left to the employee.

From:

1) Employee side: 12% EPF A/c No: 1

2) Employer Side: 12%

3) 67% EPF A/c No: 1 & 8.33% Pension A/c No: 10

3) Employer side: 1.61% (charges)

a) EPF Admin Charge: 1.1% A/c No: 2

b) EDLI Charge: 0.5% A/c No: 21

c) Admin charges on EDLI: 0.01% A/c No: 22

Please review and ensure compliance with the PF regulations.

Thank you.

Hi,

In this situation, you must consider one more thing. If any of the employees working in your establishment is from another organization and has an EPF Number, then you must join them under the EPF Act irrespective of their wages. In this case, you can limit your contribution to Rs. 6500/-

Jishnu V. Nair Tax & EPF Consultant Kerala [Login to view]

Dear,

If you have 25 employees, then you have to obtain a PF code. PF can be deposited for the employees whose basic salary is less than 6500. The rest of the employees may be exempted.

Thank you.

JS Malik

A question to Mr. Madhu and Mr. Malik,

Once anyone becomes a member of PF, can he/she obtain exempted status in the future when shifting from one job to another with a gap of two months?

Please suggest.

Pravin

Dear,

When a person joins a new organization, the HR department of that organization takes Form 11 from each employee, which states that the employee was not a member of the PF in the previous organization. Legally, if you have not withdrawn the PF from your previous employment, then you should be a member of the PF in the future organization as well. However, generally, new organizations take Form 11 from employees and do not enroll them if their basic salary is more than 6500.

Thank you,
J. S. Malik

Dear Friends,

All of you are correct. However, employees whose salaries are more than Rs. 6500/- can also join as PF members, but their contributions may be stipulated into two accounts. Some organizations deduct PF @ Rs. 780/- from the salaries of employees earning more than Rs. 6500/- and deposit it into PF. In such cases, in Form-3A, they should clearly state at the bottom: "EXEMPTED EMPLOYEE SO PF IS CALCULATING @ Rs. 6500/- ONLY." PF is a social security benefit for employees that every employer should consider.

Regards,
PBS KUMAR

Dear Pravin,

In the future, if an employee gets a job with a two-month gap between the old one and the new one, it will not continue the same, but his salary will be more than 6500/- (BA+DA). If the employee's BA+DA is 6500/-, it will continue the same.

Regards,
Santhosh

Dear All,

If an establishment has more than 20 employees, they have to get registered under the PF Act. PF is calculated at 12% of the basic and DA.

If the wage (Basic and DA) is equal to or below 6500, the employer has to contribute the deducted amount.

If the wage (Basic and DA) is above 6500, the employer has the option to pay only 780 and not 12%.

Regards,
Venkatesh
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