Can Employees Earning Over Rs. 6500 Be Excluded from Employer PF Contributions?

Hi All,

I have a doubt regarding whether an employee earning more than Rs. 6500/- (basic + DA + retaining allowance if any) can be excluded from paying PF contributions (Employers part)?

Please reply to my query.

Regards,
SKANTHA

Dear Skantha,

If an employee is receiving a salary of more than Rs. 6500/-, then you can exclude him from EPF (i.e., no deduction from the employee's salary and no payment of employer contribution).

Jishnu V. Nair
Tax & EPF Consultant
Kerala

Dear Skantha,

Mr. Jishnu is absolutely right. However, the employer has to take a declaration on Form 11 that he was not a member of EPF in the previous organization.

Thanks,
JS Malik

If an employee is drawing more than Rs. 6,500 at the time of joining, he can be excluded from PF contribution. However, when an employee's salary crosses Rs. 6,500 while being a PF member, he cannot quit but is required to contribute PF based on Rs. 6,500 and not on his total salary.

Hi,

An employee joining an organization with a salary of more than ₹6500 can be exempted from the PF contribution. However, if an employee was earning less than ₹6500 and paying PF contributions at the time of joining, they have the option to stop the contribution for the amount earned over and above ₹6500 only.

Trust this clarifies.

Kavita Tandon

Hi All,

Upon joining, if an employee is drawing 6000/- (Basic+DA+RA), they will contribute towards PF. After one year of service, if their pay increases to 7000 (Basic+DA+RA), they will continue to be a member of PF.

However, if a person joins an organization for the first time in their career and their pay is 7000/- (Basic+DA+RA), they can be excluded from PF. Nevertheless, in this scenario, an employee can still become a member of PF with the approval of their employer and the PF Commissioner.

Generally, in most organizations, employees who are drawing more than 6500/- are members of PF.

Regards,
Jagan

Thank you very much, Sir. A small question again: If that particular employee (earning more than Rs. 6500/-) is a new employee in my organization and has PF membership in his previous organization, he wants to transfer his PF amount to the new account of this organization, how far are we bound to pay PF contributions from the employer's side.

Thanks and Regards,

Skantha

Dear Skantha,

Your responsibility towards contribution, i.e., from the employer's side, will start from the date of joining duty even if the transfer of the PF account may have some delay.

Hope this clarifies.

Thanks & Regards,
C. Bhushan Sharma

Dear All,

If an employee joins an organization where his basic is kept more than ₹6500/-, he cannot be deprived of PF benefits if this employee was already a member of PF in the previous organization. The current employer can only restrict his liability up to ₹6500/- but cannot stop him from becoming a member in his organization.

Ravi Gupta

If I join an organization and my Basic is way above 6500, can the employer FORCE me to contribute 12% of Basic? What should I do to prevent my employer from contributing more than mandated by law? I assume that since I am joining new, I should be able to contribute nothing even if I have been a member before. Please help soon, as I need to reply to the offer ASAP. From all I have read, all I need to do is to give a declaration (in Form 11?) and that is it!

The correct version with spelling, grammar, and punctuation errors corrected and proper paragraph formatting is:

6500/ slab for exemption for deduction and remittance under the EPF and MP Act constrains Mr. S. Kanta's company to deduct the provident fund contributions at 12% of the Basic+DA+ Retaining Allowance from the salary of the workman. However, the employers' liability shall be restricted to contributions towards EPF and pension share to the salary slab of 6500/- only.

Kannan sir,

If you provide Form 11, it will be utilized by your employer to exclude you from the EPF membership.

Thank you, I will inform them that I will sign Form 11 and hence they need to include the PF amount specified in the offer into my monthly pay. However, I do not know why they are saying "this is company policy and we cannot change".