Confused About Low PF Contribution? Seeking Advice on Employer's Compliance

Hi All, I have recently joined a new company. My basic salary is Rs. 69,000, but my PF deduction is only Rs. 780, so the contribution of the employer towards the PF is also only Rs. 780. I had the idea that the contribution to the PF account should be a minimum of 12% of the basic salary. I talked to the HR regarding the same, but I was told that this is as per the rule. Contributing at least 12% + 12% towards my PF account saves some tax and also secures my future. So please help me regarding this, and if this is wrong, where can I complain about it, as this amount is almost the same for every employee here.

Thanks & regards

I believe the company is contributing EPF on Rs. 6,500.00 as part of your basic salary. As per the rule, EPF contribution is mandatory up to Rs. 6,500.00, so you cannot claim it as a right. Therefore, I would advise you to pursue your employer to contribute the whole basic salary or opt for voluntary contribution of your total basic salary. I recommend discussing this with your HR personnel as I believe this information will be helpful for you.

Regards,
Shaikh Abedeen
Human Resources Professional

I completely agree with Mr. Shaikh Abedeen. Companies are deducting from your basic salary because if they do so, the amount of their contribution will also increase. That's why they are taking this action.

Voluntary PF Deduction Advice

In this case, it would be better for you to opt for a voluntary PF deduction at a higher rate. However, the company's contribution will be restricted to ₹780 only. This is because the company cannot change its policy for just one employee. If you wish, you can ask the company to deduct PF on the entire basic amount, and the company can do so. You will need to fill out a form for that, which is enclosed for your reference.

Regards,
Nilesh V. Soni
Labour Laws Consultant
[Phone Number Removed For Privacy Reasons]
[Email Removed For Privacy Reasons]

Yes, it's right. The maximum ceiling limit is ₹6,500, and up to this amount, EPF contribution is mandatory. After that, it's optional and depends on the company for deduction on the total basic. However, voluntary contributions can be made if you want to save on your tax deduction for IT.

Regards,
RK Panda
Legal Professional
EPF, ESIC, EXCISE, Service Tax

I agree with Mr. Panda because the employer is not duty-bound to pay more contribution beyond the prescribed limit of the PF Act. If the employee's basic salary is more than ₹6,500, the employer can even deny depositing the PF contribution as per the rule if the employee is not an old member of the EPF.