Confused About PF Contributions? Seeking Clarity on Employee and Employer Limits

Dear All, Please answer my queries as I've been asked the same in interviews but don't have a sure answer for them:

- What is the maximum voluntary Employee's contribution for PF? And is it necessary to specify this voluntary contribution at the time of joining, or can it be availed at any time? Is there a specific procedure for it?

- What is the maximum Employer's contribution? Is it 12% of the actual basic salary, or can it exceed that limit? If it can go beyond 12%, what would be the extent?

Thanks & Regards,
Jeene

Dear Jeene, this topic has been discussed thoroughly many times. Even now, if you take a look at the "Recent post," you'll find many threads on it. If you know Madhu Sir, one of our most popular and beloved Moderators, you simply need to:

1. View his public profile,
2. Then click on "Show All Statistics" or click on the "Statistics" tab;
3. Click on either "Find all posts by..." or "Find all threads started by..."
4. Read the posts/threads;

and you'll find the answer. I hope the above will suffice unless you are looking for 'being spoon-fed'.

Warm regards.

An employee can contribute more than 12% of their share to the PF. The employee contribution exceeding 12% of their Basic+DA+RA is termed as a voluntary contribution to the PF. The employee can contribute up to 100% of their Basic+DA+RA. An employee can contribute to VPF at any time during their service, not necessarily at the time of joining.

An employer's contribution is 12% of the actual Basic+DA+RA or Rs. 6500 (the maximum limit of Basic+DA+RA), whichever is less.

Regards,
Shreekanth P.R

Thank you, Sreekanth, for replying.

Thank you, Mr. Raj Kumar, for letting me know the exact path. I had searched in Madhu Sir's public profile but did not exactly find it.

Regards,
Jeene

Voluntary Provident Fund: You contribute more towards your PF, over and above the 12% mandated by the government. This additional voluntary contribution enjoys all the benefits of PF, except that the company doesn't contribute an equal amount. However, the interest rate is equal to the rate of interest for PF, and the withdrawal on retirement is tax-free. VPF can be a good option if you are very risk-averse and want a safe option like PF. Please note that the maximum contribution allowed towards VPF is 100% of your basic + dearness allowance (DA).

Regards,
Dharaneesh Kumar.V
HR/Admin Executive
Organica Aromatics Pvt Ltd

Dear Jeene,

Employees' and Employers' contributions are as follows:

Scheme | Employee's | Employer's
---|---|---
PF SCHEME | 12% | 3.67% OUT OF 12%
PENSION SCHEME | NIL | 8.33 OUT OF 12%
EDLI | NIL | 0.5%
ADMIN CHARGES @ 1.1% OF THE TOTAL WAGES/SALARY
ADMIN OF EDLI @ 0.01% OF THE WAGES/SALARY

REGARDS,
SURESH

Dear Jeene,

Employees' and Employers' contributions as follows:

Scheme Employee's Employer's
PF SCHEME

If an employee is interested in contributing more to the PF amount above 12%, they must seek underwriting from the employer and submit a request jointly to the office not below the rank of Assistant Provident Fund Commissioner. Not many employers are interested in employees contributing an excess amount to PF because they have to pay administration charges and EDLIS on a percentage par with the employee's contribution to the PF.

Regards,
Shreekanth.P.R