Understanding PF Deductions in Employee Salary and Statutory Compliance

Dear All,

I need one piece of information from your end regarding PF. If, suppose, the Principal employer has paid an excess amount of PF (employer part) for the last year, is there any option to deduct this PF amount from the employee's salary? Please revert back to me with a suitable answer; it's very urgent. :icon13::-?

Thank you.

No, because the same amount had been deducted from his salary as well. You will not make any changes to his contributions.

Pankaj

Dear Mr. Jha,

I agree with you, but at our manpower outsourcing agency, they deduct the employer's PF contribution from the employee's salary. Is there any option like that?

Regards,
Santhu

Dear Mr. Malik,

We are providing outsourcing services for labor compliance/statutory requirements with employees. The fixed amount per employee is 28,000/-, covering all statutory compliances such as Bonus, PF, Leave with wage (excluding ESI). These services are applicable nationwide, with 31 employees deployed across all our locations. However, it has come to our attention that the employees are only receiving 10,000/- with PF and PT deductions. Unfortunately, we have discovered that one of our personnel is involved in this process, handling bill processing, and holding a top position in our company.

Please advise on how to prevent this practice and specify the percentage he should pay as salary according to the agreement. Are there any notifications or rules governing this situation? Your guidance on resolving this matter is greatly appreciated.

Regards,
Santhosh

Please tell me when PF is deducted from the salary. Is there any rule for a private company that has not more than 15 employees?

Dear Panseriya,

There is no rule for employees that the agreement is for 31 employees only, and PF deductions have been made for the last 2 months.

Regards,
Santhosh

No, there is no legality to deduct from an employee's salary once the employer declares the contribution is voluntary.

Dear Friend,

An employer can deduct a maximum of 12% of your basic salary towards PF. If the employee and employer wish to contribute a higher percentage, they can do so. The employee can limit their contribution to 12% of their basic salary. If your basic salary is above 6500, then it is not compulsory for you to join the PF.

Benson Mendez
Cochin

Dear Santhu,

There is no issue in it; you can adjust it in your Annual returns. The PF department will calculate the ER's share based on the Total Basic, and as for the EE's share, he can contribute more than 12% as he wishes as VPA. If you need any further clarification, you can check with the concerned PF officer for the adjustment. But you can't deduct simply from the EE.

Regards,

Gowrishankar.G

Hi Santu,

After reading your messages, the case is not clear. In fact, you should understand the basic things about PF, like who is eligible, how much amount should be deducted, when and where to be deposited, and what are the certain documents to be submitted to the PF department (monthly and yearly).

As far as the question of outsourcing the statutory requirement, you must also know the answers to all the questions mentioned above, and your problem will be resolved automatically. You need to calculate on your own and compare with outsourcing providers.

You may call me at 9818818929 for further discussion.

Regards,
Anil Yadav

Dear all, please give me PF Form No. details and definition. I am a fresher and I need to know how many PF forms there are and their definitions.

Well, you can submit the challan and contact the labor officer. Tell them that we are contributing the employer's share and deducting from the employee as well. However, we have exceeded the acceptable limit for contribution. Now, we would like to contribute the minimum employer share, which is also 12%. There can be no penalty on you for exceeding the limit; we are not reducing it. You don't need to worry.

For further clarifications, log on to the PF India site and find the number of the regional PF office. Talk to an officer there; they will help you out. They are extremely helpful. Trust me. I hope this is useful.

What is the procedure to change the PF account from one branch to another branch of the same company (just because of the transfer)?

Please let me know if you need any further information.

Hi sir, please clarify my doubt. Is incentive part of the salary when calculating ESI, PF, and PT? Do we have to consider the incentive as a part of the salary? For example, if one person is getting 7500 per month and their incentive is 4100, should I deduct ESI, PF, and PT based on 7500 only or on the total of 11600 (7500 + 4100)?

For PF calculation:
- Basic + DA = 5800
- PT = 150

If we consider only the 7500 amount:
- Basic + DA = 3750
- PT = 60

Which calculation method is correct in the scenarios mentioned above?

Dear Murthi,

As per the new amendment on PT, if an employee is earning below 10,000/-, there is no need to deduct the PT from the employee's salary.

Regards,
Santhosh