Understanding EPF Contribution: What Are the Employer's Obligations?

Dear All Friends,

Please provide information regarding the compulsory slab of EPF Contribution (i.e., COMPULSORY CONTRIBUTION BY EMPLOYER). 😊

Thanks & regards,
Parimal

Dear,

If an employee's basic salary + DA is less than 6500 per month at the time of joining, the employer is bound to deduct and pay PF contribution.

Regards,
J.S. Malik

In this scenario, the employee's contribution will be 12% of basic + DA towards PF, while the employer will contribute 3.67% towards PF and 8.33% towards the pension fund.

Thank you!

Dear Parimal,

I would like to correct the wording written by Mr. J.S. Malik that EPF is applicable to salary up to 6500 or less (means Basic+DA per month) at the time of their joining and it is applicable to organizations having 20 or more employees. In case both of the above terms are not complied with, then an organization can voluntarily avail this facility by requesting to the EPF organization.

Once an employee is registered under the EPF organization, then he/she has to deduct PF from their salary even if the salary is above 6500/month (for example, an employee joined the organization with a salary of 4000 per month and is liable to deduct PF amount from his salary. After two years, his salary has been revised to 9000 per month; however, as a principle, PF is not applicable because he crossed the 6500/month limit, but there is a law to restrict this act, and he still remains a part of PF with PF being deducted from his salary until he is working in the same organization).

In case of any queries, please contact me for more details.

Any employee whose basic salary + DA is less than or equal to Rs. 6500/- is liable for PF contribution, and the employer is bound to deduct and pay their contribution part to the PF department.

Regards,

Pankaj Chandan

Dear Sajid Ansari,

I want to know about. Is it on gross salary or is it on basic? Please be specific. If gross, what are the things that should be added? If on basic, does it mean basic + ?

Waiting for your response.

Dear RNS,

Please read the post fully; they have mentioned clearly that PF should be deducted at 12% on (Basic + DA).

Dear All,

As Mr. Parimal stated, an employee is required to contribute to PF if their basic salary increases to more than 6500/month while remaining in the same company. He was contributing to PF while he was in his previous organization, but now that he has joined a new organization and his basic salary is more than 6500/month, does he still need to contribute?

Hi friends,

1. Mr. Sajid Ansari has answered the query to the point, but his last sentence has again left the core question unanswered. Taking the example set by him, I would like to know that after the salary is revised from Rs. 4000/- per month to Rs. 9000/- per month, will the EPF deduction be restricted to the ceiling of Rs. 6500/- per month, or will it continue to be deducted on the actual salary drawn (Basic + DA) i.e. Rs. 9000/-.

2. Can anyone help me in finding this clause in the EPF Act or any notification related to it?

3. Furthermore, I am interested in knowing whether and how EPF is applicable where employees are paid on a piece-rate basis.

Thank you,
Rustom Patel
AGM-HR & Admn

Dear RNS,

Please see the above sentence again (means Basic+DA per month). I think you have got your answer now.

Dear Ramesh,

If an employee joins a new company with the basic salary above 6500, then he need not be a part of the PF account. If the employer and employee mutually agree, then they can choose to participate in it.

Dear Mr. Ramesh,

An employee will be bound to pay contributions until he is receiving wages/salary, regardless of where he is working. However, this also depends on Form 11 (Declaration form) filled out by the employee at the time of entering new employment.

Thank you.

Dear All Friends,

My PF is showing on the payslip as Rs. 432 per month, but I have been working for 12 months and 8 months with a deduction of Rs. 514. So, in total, I have 20 months of experience. I joined on September 1, 2006, and left on April 30, 2008. Could you please help me calculate the amount to be given by the PF office?

Thank you.

In cases of revision of salary exceeding Rs. 6500.00 per month, the employer is bound to contribute only Rs. 780.00 per month towards EPF irrespective of the hike in the salary. The contribution from the employee will continue based on the existing Basic + D.A. However, the employer may consider contributing at the existing Basic + D.A.

R.K. SINGH

Dear marellaram,

Look, the calculation is very simple. You can do it by yourself. In PF, whatever amount you contribute, your employer contributes the same amount. So, if you are contributing 432, then the employer is also contributing the same amount, i.e., 432. Now, the PF cycle is from March to February. If you calculate your full amount, you can sum up the amount and also the interest amount, which is 8.5% per annum (kindly check). From what I calculated, the amount comes to something near about 20,137, including interest and the pension scheme amount. This means to get this 20,137 Rs, you have to file two forms; Form 19 for PF amount withdrawal and Form 10(C) for pension amount withdrawal. However, if you want to transfer it, which is the best option in my opinion, then you have to file Form 13/13(A) for {within state/interstate} transfer.

Dear friends,

Please clarify the following points:

- If an employee initially joined at a salary of 8000 per month, is the employer bound to pay EPF or not?
- If an employee fills out Form-11 (declaration for not being a member of any EPF organization), then...

I am working in a service-providing company. One of the principal employers of this company is TCS. TCS is pressuring my company to pay EPF for every employee whose salary is more than 6500 per month. All employees are freshers and have not worked for any company before this.

I am awaiting your kind reply.

Thanks & regards,
Parimal Kishore

Depending on the basic salary, if the basic is less than 6500, then it is bound to that limit. However, if it exceeds 6500, then it is up to the employee.

Salary may be more than 6500, but whether the basic is more than 6500 because PF is calculated on basic + DA only.