Is Employer Contribution Required for PF if Salary Exceeds Rs. 6500?

Sirs,

I have a doubt. If an employee is drawing a salary of more than Rs. 6500/- and he wants the PF to be deducted at the normal rate, is it necessary for the employer to contribute an equal amount to the employee's share?

Thanks,
Reny

Hi Reny,

PF depends on the basic salary, so for Rs 6500/-, the employer should contribute an amount equal to the employee's contribution.

Regards,
RK

No. Once the basic salary of an employee exceeds 6500/=, he will be exempted from company contribution. Hence, it is not necessary for the management to make an equal contribution. However, the employee can opt to continue.

Sundaram

Dear Reny,

The act has a ceiling on Basic Salary of 6500/- per month for the contribution of PF, which comes to Rs. 780/- per month (max). However, once the employee crosses this ceiling of basic salary over the number of years, the employer's liability for PF is to the extent of Rs. 780/- per month (12% of 6500). Over and above this amount, the employer may contribute by virtue of an internal policy decision. However, the statute limits the contribution up to Rs. 780/- p.m.

Regards

Dear All,

Please provide me with guidance on how to effectively use the Citehr website.

With Regards,
Dev

Dear [Name],

If an employee is drawing more than 6500/-, there are three options for the employer for their own contribution:

1. The employer does not deduct the EPF of the workers who are drawing more than 6500/-.
2. The employer pays an equal share as the employee (e.g., on a 7200 salary, the employee's share is 864/- and the employer's share is 864/-).
3. The employer will pay their own contribution on 6500/- (e.g., on a 7200/- salary, the employee's share will be 864 and the employer's share will be 780/-).

Thank you,
Pawan Bhatia
09812585353

To all concerned,

1) Once an employee crosses the limit of Rs. 6500/- (basic + DA), he is out of the purview of the EPF Act. Hence, the management needs to pay any contribution for him.

2) If an employee wishes, he can opt for PF deduction and submit a declaration. Management can deduct his contribution and remit it to the government. However, there is no need for management contribution.

3) Management's cost ends once the employee crosses the limit of Rs. 6500/=.

4) In most companies, management continues to contribute, with their contribution restricted to Rs. 6500/=. In fact, this is an additional cost to the company.

If an employee's salary is more than 6500 (basic + DA) and he wishes to contribute less, then you can restrict his PF wages to the minimum wages for that class of employment.

Raj
9945698496

To all concerned,

Please note the following:

1) Once an employee crosses Rs. 6500, they are no longer eligible for management contributions to the PF. They are considered an exempted employee, and the company is not required to contribute up to Rs. 6500 or 780.

2) If an employee wishes to continue contributing to the PF, they can submit a declaration to the management expressing their desire to do so. However, the management is not obligated to make any contributions.

3) For tax returns, we must declare these employees as exempt from management contributions. The company only needs to contribute equally for the remaining employees.

Thank you.

Dear Sir,

Please advise on what an employee can do if the company is deducting his/her PF even though his basic is more than 6500/-.

Awaiting your response.

Regards,
Ajay

Dear Ajay,

I am writing to inform you that your basic pay has exceeded the PF limit of 6500/-. I am not interested in continuing with the PF contribution. Your declaration stating that you do not wish to continue with the PF is necessary for the company's records.

Thank you.

Our company is based in Mumbai. According to statutory requirements, we must conduct personal verification of our clients, which needs to be carried out by an employee of the company. As we have clients in various parts of India and our office is in Mumbai, we plan to hire part-time employees in those regions. This work is not regular but occurs intermittently.

The query is about how these part-time employees will be covered under PF, ESIC, and the Minimum Wages Act. Currently, our company is covered under PF and ESIC. We are planning to pay them the bare minimum since the work is not consistent, and we only require part-time assistance. If we were to hire full-time staff for this role, it would not be feasible for us to keep them engaged full-time and cover their travel expenses.

We need guidance on the minimum salary that should be paid to them as per the regulations in Maharashtra. This is very urgent.