Is an Employee with a Basic Salary Below Rs 6,500 Eligible for PF Deductions?

Dear Seniors,

Please suggest whether an employee with a basic salary lower than Rs 6,500 is eligible for PF deductions.

Thanks and Regards,
Renuka

If he is employed in an establishment covered by EPF, certainly he is eligible to be covered by EPF.

Regards, Madhu.T.K

If the person employed in an establishment is covered by EPF, then PF deduction is compulsory for a basic of 6500. The percentage of the deduction is 12% from the employee's side and 13.61% from the employer's side.

Employees drawing a basic salary up to Rs 6500/- have to compulsorily contribute to the Provident Fund, and employees drawing above Rs 6501/- have the option to become a member of the Provident Fund.

Also, please check the document. It is compiled from various posts by different members of Cite HR.

Please find attached the document on PF compiled from various sources from Cite HR.

The Act initially applied to factories/establishments falling within six specified industries that had completed three years of existence and employed 50 or more persons. With effect from 31-12-1960, establishments employing 20 or more persons were also brought under the purview of the Act.

The Central Government has residual powers to apply this act to any establishment employing fewer than twenty employees. By virtue of these provisions, the Employees' Provident Fund Scheme has been extended to cinema theaters employing five or more persons, effective 1-10-1984. There is also a provision for the voluntary application of the Act to any establishment upon a joint request from the employer and the majority of its employees, to whom it does not apply otherwise.

An establishment to which this Act applies shall continue to be governed by this Act, notwithstanding that the number of persons employed therein at any time falls below twenty.

Presently, an employee at the time of joining the employment and receiving wages up to Rs. 6500/- is required to become a member. Now, an employee is eligible for membership of the fund from the very first date of joining a covered establishment.

For your information.

Warmest Regards,
Mohan.M.S

I am having a query in this regard. Please consider the below scenarios and inform if the employee would be eligible for PF or not.

1. Gross salary of an employee is Rs. 7,500/- and his basic is Rs. 6,000/-
2. Gross salary is Rs. 15,000/- and his basic+DA+HRA is Rs. 6,500/-
3. Gross salary is Rs. 10,000/- and basic is Rs. 4,500/- with HRA, LTA, and other allowances paid separately.

Thanks & Regards,

All employees having Basic+DA ≤ Rs. 6500.00 are covered under the EPF Act, and it is mandatory for the employer to deduct PF contributions. As per my knowledge, if any employee who was covered under the EPF Act earlier, but now their Basic+DA is greater than Rs. 6500.00, then he/she is still covered under the EPF Act.

Dear seniors, please correct me if I am wrong.

Thanks,
Bhupesh

Dear Renuka,

If you fill out Form 11, you will be exempt from the employer's share in PF for employees with Basic+DA > Rs. 6500.

Seniors are requested to correct me if the above information is wrong because this fact was mentioned to me during a formal group discussion.

Yes, any employee whose (Basic + D.A.) is less than or equal to 6500/- is covered under the P.F. Act.

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Dear Friends,

Please advise and guide with your valuable views on the following:

EPF Liability for Small Companies

1) A company has a maximum of 8 employees and is not covered by EPF. If it outsources any job works or job contracts to related or unknown parties who work with a group of two to three employees at most and are not covered under EPF, the total number of employees at any given time, including both the company's employees and the job work contractors, does not exceed 20. In this scenario, is the company liable to deduct or pay EPF?

Please provide your feedback on-site or, if more convenient, at [Email Removed For Privacy Reasons].

Thank you.

Regards

So long as the total number of workers, including casual labor engaged for at least a day, contract workers engaged to do job work under your supervision, and those drawing a salary of more than $6,500, does not exceed 19 on any day, there will not be any coverage. However, if the government amends the PF Act and brings all establishments employing 10 or more under PF coverage, then the story will be different.

Regards,
Madhu.T.K

Dear Sir/Madam,

I am working as an Accounts Executive. In my salary, Basic+DA = 15500. Am I eligible for PF? Please let me know.

If this is your salary when you joined this organization or when the establishment became covered by EPF & MP Act, then you could be excluded from coverage. On the other hand, if the establishment is already covered, and you were appointed on a salary that was not more than Rs 15,000, but with the increments received later, your salary has now become Rs 15,500, then you should have been covered.

Madhu.T.K