Confused About PF Deductions on My Salary – Can Someone Explain How It Works?

I was getting a 7500 Rs. take-home salary in my previous job, but there was no PF deduction or anything like that. Now, I have come to know that PF is deducted on a minimum of 6500 Rs. Can anybody explain this? I am confused.

Understanding PF Wage Slab and Contributions

PF wage slab is Rs. 6500, where PF wage includes: Basic + DA + RA.

Example: Let's say your actual salary is Rs. 7500 (fixed by the company), with the basic percentage being 50% of the actual salary or the salary you receive with OT or other allowances if they vary. Then, the basic of your salary is calculated as (50/100) * 7500 = 3750.

Now, your PF wage is 3750. The employee PF contribution rate is 12%, the employer PF contribution rate is 3.67%, and the employer pension contribution rate is 8.33%.

Thus, your (employee) PF contribution is only deducted from your PF wage of 3750, which is (12/100) * 3750 = 450.

Please review the basic salary and PF-related rules of scheduled industries/factories/establishments in your state, as percentages vary for sick industries, among others.

Regards,
Kalyan

You have told me about the PF amount, but they were not deducting it. I was getting 7500 in hand.

Branch Information

It was a big group with different branches. In my branch, there were at least 20 people.

In your previous job, you mentioned that your take-home salary was Rs. 7500. Are you currently in the same position and profession? Have you ever received your payslip? You mentioned working in a branch, which could be a commercial establishment connected to the Head Office/Factory. However, you haven't specified the type of company you work for.

EPF Regulations and Applicability

EPF regulations may not apply to an establishment that falls under the coverage of the Shops and Establishments Act of 1996 or earlier, especially if the establishment, at the time of registration, had a workforce of less than 10 and did not register with EPFO subsequently.

I can assist by providing information related to your company, such as factories, seasonal or non-seasonal, Head Office, shops, warehouses, and branches. This is crucial as we will be discussing Business Laws and Labor Laws. Stay connected for further assistance.

Regards,
Kalyan

Hi, the PF contribution is 12%. If your basic salary is more than 6,500, you are liable to contribute based on 6,500 only.

Thank you.