Are Austrian Employees in India Entitled to PF? Understanding Remittance and Withdrawal Procedures

I would like to inquire about two foreign employees who belong to Austria. We have paid their salaries above the PF limit. This is their first time in India, so are they entitled to PF calculation under the PF Act?

Procedure for Remittance and Withdrawal

If yes, what is the procedure for remittance and withdrawal of their amount?

Reason for Non-Entitlement

If no, what is the reason behind it?

Thank you for your support in advance.

Best regards,
Parimal

I am not sure if statutory benefits for Indian employees such as PF and ESI will be applicable to foreign employees working in India on work visas. I suggest double-checking with the local PF authorities.

Regards,
TS

Dear Friend,

The Government of India has recently made fundamental changes in the Employees Provident Fund Scheme, 1952, and the Employees Pension Scheme, 1995 (collectively referred to as Indian Provident Fund schemes), which will impact expatriates and the employers with whom they work in India.

Introduction of 'International Workers'

A new concept of 'International Workers' (IWs) has been introduced, which includes expatriates (foreign citizens) working for an employer in India and Indian employees working overseas.

As per the Notification dated 1 October 2008, 'International Worker' means:

- (a) An Indian employee having worked or going to work in a foreign country with which India has entered into a social security agreement and being eligible to avail benefits under a social security programme of that country, by virtue of the eligibility gained or going to gain, under the said agreement.
- (b) An employee other than an Indian employee, holding other than an Indian passport, working for an establishment in India to which the Act applies.

The expatriates working in India are generally not required to contribute to the Indian Employee Provident Fund and the Pension Scheme as their salaries exceed the threshold limit of INR 6,500 (USD 145) per month.

Regards,
VINOD

As per the present rules of EPF, international workers working on an employment visa have their PF deducted. Unfortunately, the bracket of ₹6500/- is not applicable to international workers, so the PF at the rate of 12% is deducted from their full salary.

For international workers, they cannot withdraw the PF before they reach the age of 58 years, even if their contract expires early.

Regards,
Shekhar

It's good that you have clarified the query very clearly. However, it could be more useful to Parimal if you provide references or links to the relevant clauses in the Acts so that the decision-makers can be informed.

Regards,
TS

Based on my understanding, we do not have any Social Security Agreement (SSA) with Austria. How should we manage the Provident Fund (PF) act even though their salary exceeds INR 6500.00? Please advise me on the next steps.

Best regards,
Parimal

Useful links on the subject line:

http://www.epfindia.com/site_en/International_workers.php?id=sm3_index

https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/taxnewsflash/Documents/india-nov26-2012no2.pdf