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

The act has a ceiling on Basic Salary of ₹6,500 per month for the contribution of PF, which comes to ₹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 ₹780 per month (12% of ₹6,500). Over and above this amount, the employer may contribute by virtue of an internal policy decision. However, the statute limits the contribution up to ₹780 per month.

Regards

Dear All,

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

With Regards,
Dev

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,

Regards

Clarification on EPF Contribution for Salaries Above Rs. 6500

1) Once an employee's basic salary plus DA exceeds Rs. 6500/-, they are no longer under the purview of the EPF Act. Hence, the management is not required to pay any contribution for them.

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

3) Management's cost ends once the employee's salary 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's salary exceeds 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 Rs. 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.