Is PF Deduction Mandatory for Employees Earning Over ₹6,000? Seeking Advice on Avoiding It

Is PF mandatory for all employees whose gross salary is over ₹6,000 per month? Is there any procedure to avoid the deduction? Please help.

Thanks,
Suni

For EPF deduction, the general salary components are Basic + DA. If it is equal to or below ₹6,500, then PF deduction is mandatory.

Regards,
Abbas. P. S

According to PF norms, it is mandatory to deduct from employees, and the company has to contribute the same percentage, which is 12%. If any employee's basic salary crosses Rs. 6500 and they do not want to continue as a PF contribution member, they can opt for voluntary contribution.

Dear Abbas, one of my friends is getting Rs 7,000 per month as his take-home pay. However, he does not want to opt for PF deductions. Is it possible for him to cancel the PF deduction? Please help.

Suni.

Dear Suni, To my knowledge, once an employee is enrolled in the EPF, they must continue even if their salary exceeds the ceiling limit. Colleagues with different experiences or awareness of such provisions may share their knowledge.

Regards,
Abbas.P.S

According to my knowledge, the PF deduction will be made if the employee's basic pay is equal to or less than ₹6,500/-.

Hi Abbas,

According to the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the definition of an excluded member is as follows: "an employee whose pay, at the time he is otherwise entitled to become a member of the fund, exceeds Rs. 6,500 per month." Based on this definition, we can exempt any employee from contributing to the Provident Fund if their pay surpasses this limit. Feel free to revert if you have any queries.

Regards,
Ravi

Hi Suni,

If your friend is receiving a salary of Rs. 7,000 per month, it is important to ascertain whether this amount refers to his basic salary or his gross salary. If it is his basic salary, he will be eligible for exemption from contributing to the Provident Fund by filling out Form 11. Please let me know if you require further clarification.

Regards,
Ravi

Dear Ravi,

This I already clarified with my friends in our RPFC Office. They say that an excluded employee means he never contributed to EPF. But here the query is regarding exemption of an enrolled employee.

For example: If there are 25 employees in an organization, out of which only 5 are within the ceiling limit. As per the Act, normally EPF is not applicable. For the total number, all employees are considered. However, deductions can be done on the 5 employees, treating the others as excluded employees.

Abbas.P.S

For the purpose of coverage under the EPF and MP Act, 1952, the total number of employees is considered irrespective of their wages and limits. However, the payment of contributions shall be limited to the ₹6,500 norms or otherwise.

A company may be covered based on a staff of 20 employees, but it may only pay ₹7 monthly scheme administrative charges in the event there are no included employees.

Please feel free to ask for clarification on the subject matter.

Thanks and regards,
Prasiddh
[Phone Number Removed For Privacy Reasons]

If an employer is enrolled in EPF and one of its employees doesn't want to deduct his/her PF, is it possible? What does he/she need to do?

Thank you.