PF-BAsic>6500-Employee Contribution

Hi Friends,
Even my friend worked with an IT firm wherein they had no PF cutting froms salary no matter how much u earn.
Do every company has to split their salary components??
What if the employees are given consolidated salary above 6500/-???
Plz help...
Regards,
Swati
HR

Minimum 20 employees are required to take PF registration.
There are some industries where less than 20 employees are also covered.
Its very surprising to read that people are getting their PF deducted even after having their basic above 6500 Rs. Many times employees do not want to be a part of the PF scheme.
We have over 40 employees who are earning above Rs 10500 and they have voluntarily signed the Form nos 11 (Revised) to declare that they do not want to be included in the PF scheme.
They are also not covered under ESIC.
We have only given PF to employees like the office boys where we pay the employee and employer contribution since their salary is minimum and we want them to benefit in way or the other.
The above steps were taken after consulting the respective Enforcement officers.
PF deduction is not compulsory if the employee is earning a basic of 6500 and above.

Hi Divya
As per The Employees Provident Funds Scheme, 1952, Chapter V, Section 29 (2), employer is not bound to deduct more than 12% wages on a Basic+DA Wage of Rs 6500/-. However a lot of employers pay on the actual Basic+DA of the employee (i.e even if is more than Rs 6500/-) to give additional benefit to the employees.
In your case the employer wants to restrict their contribution to Rs 780 which is permissible as per the law. Hope that clarifies your issues.
Sunil

Hi divya,
As per present laws its 12% but it should be considerable the laws and acts of the company wen it established the amount of PF deduction will be mentioned their by Employer in its act If u have doubt refer Reliance fresh or any company policy due to this some companies will deduct less amount in some companies They ll deduct less amount

Dear All,
RS.6500/- is wages specified under para 2(f) of the PF scheme, 1952 which can be raised by issuing notification. ( proposed limit is going to be increased by RS.15000/-). So the employer obligation to deduct 12% of PF from BAsic wages upto RS.6500/- p.m. (mandatory) Now if the basic exceeds RS.6500/- then it is an option for both employer as well employee whether to restrict contribution on basic upto RS.6500/- or to pay on full basic. Even in some cases employee opt for contibuting PF on full basic while employer restrict his share of PF only on basic of RS.6500/-. It is legal.

hi all,
if an employee basic is 10000/- and his pf contribution is 1200/-(12%) my question is that how much contibution of employer 1200/- or 780/-(of 6500/- basic)
regard
navi

Dear All,

Most of the friends are given a positive response on PF. Mr. Pathak ji is correct. For further clarification the following information may useful for you all.:

Clarification about Contribution

After revision in wage ceiling from Rs.5000 to Rs.6500 w.e.f. 1.6.2001 per month, the government will continue to contribute 1.16% upto the actual wage of maximum Rs.6500 per month towards Employees’ Pension Scheme. The employer’s share in the Pension Scheme will be Rs.541 w.e.f. 1.6.2001.

Under Employees’ Deposit-Linked Insurance Scheme the contribution @ 0.50% is required to be paid upto a maximum limit of Rs.6500.

The employer also will pay administrative charges @ 0.01% on maximum limit of Rs.6500 whereas an exempted establishment will pay inspection charges @ 0.005% on the total wages paid.

Notes:

The above clarification is given by taking wages upto a maximum of Rs.6500 towards wage (basic+DA).

Since an excluded employee i.e. drawing wages more than Rs.6500 can also become member of the Fund and the Schemes on joint request and if, for instance, such an employee is getting Rs.10,000 per month, his share towards provident fund contribution will be Rs.1200 e.g. 12% and employer’s share towards provident fund contributioin will be Rs.659 and Rs.541 towards Employees’ Pension Fund.

Regards,

PBS KUMAR

It is correct and necessary that PF is on Basic +D A deduction is of 12% but as some of the companies take only basic and some of the companies take Basic & DA & not any other allowances with the limit of 6500/- if they take more and deduct more it is the companies polices but min should be 12%
Satish

Hi Ms. Divya,
PF has given an option to limit the PF deduction to 6500/- and remit only 12% for 6,500. What ever may be his basic, 12,500 or 25,000, that do not matter, But PF deduction can be limited to 6500/- and remit only 780 from employee and employer too. Hope you are clear now.
Regards,