Understanding PF Membership: Does a Salary of Rs 6501 Qualify and Is There a Rs 10000 Cap?

Respected Sir/Madam,

Hi, if upon joining the salary of any employee is Rs 6501.00 (Gross), will it be considered as a membership? Please clarify the related Act and its practice. Also, is there a maximum limit of Rs 10000.00 for membership in PF?

Thank you,
Prem

Email ID: prms_23@yahoo.co.in

Actually, the thing goes like this.

EPF is calculated on the basis of Basic + DA. However, gross may consist of Basic + DA + HRA and other allowances. So, if the basic + DA is less than 6501, he is a member of EPF. But the thing is, you can give the whole amount as consolidated pay and then exempt him.

No, there is no maximum limit for EPF; the maximum limit for ESI is Rs. 15,000.00.

Hi,

The eligibility for PF is (Basic + DA) up to Rs 6500/-; it is compulsory for employers to deduct PF provided there are at least 20 employees. For employees earning above Rs 6500/-, it is at the discretion of the company to deduct PF.

There are two possibilities in this case. For example, suppose an employee gets a basic+ DA of Rs 15000. The employer can deduct 12% (8.33% + 3.67%) on Rs 15000, or the employer can limit the deduction to Rs 6500/-.

I have attached a file that provides various scenarios.

Regards,
Shweta Nair

Hi Friends, I am new to this site. Kindly help me out with this topic. I have gone through the PPT; it helped me a lot, but I want to ask if the salary range is above 12,000/-, will the calculation be the same? Kindly upload a few PPTs if possible.

Kindly brief me more.

Regards, Sudipta