Understanding PF Contributions: Who Pays What and How It's Deducted from Salary?

Hi to all, this is Subhrat. I am an HR student. I want to know the PF contribution made by the employee and employer and also want to know from whom the contribution will be deducted from the basic salary.

Regards,
Subhrat

You are a student of HR. I am too. Welcome to this forum with my response to your first query/post. Your query is a bit confusing to me, but I am pleased to reply to you.

PF Contribution Details

The PF contribution made by the employee and employer is at 12% of the employee's salary. Salary includes basic pay, DA, and any retaining allowance paid.

Compulsory Contribution Conditions

For salaries below Rs. 6500 per month, PF contribution is compulsory. It is not compulsory for salaries above Rs. 6500 if the employee is not a member of PF already. Once an employee becomes a PF member, they must remain a member until the end.

Reading and Resources

Reading should be your passion. You need to read extensively, especially about the features of various labor laws. I recommend purchasing the book "Employer's Guide to Labour Laws" by S R Samant. If you do not understand any provision, feel free to ask this forum for help.

I hope this helps clarify things for you.

Regards

But what about the remaining 1.61% that is contributed by the employer?

With respect to PF contribution, an employee contributes 12% of their basic + DA, while an employer pays 13.61% of the employee's basic + DA.

Breakup of Employer Contributions:

1. Employee Provident Fund - 3.67%
2. Employee Pension Scheme - 8.33%
3. Employee Deposit Linked Insurance - 0.5%
4. EPF Administrative Charges - 1.1%
5. EDLIS Administrative Charges - 0.01%

I hope this information satisfies your query. Feel free to reach out if you have any further questions.

Regards,
Garima Singh

You mean the 12% will be deducted from the employee's salary and the employer will pay an extra 13.61% for PF?

Yes, you are correct. The employer will pay an extra 13.61% of Basic + DA.

It means the total amount of PF that will be deposited in the employee's PF account is 12% + 13.61% = 25.61%.

No, dear. Only the employer's 12% and the employee's 12% go to the PF and Pension Fund. The remaining 1.61% goes to admin charges and the Insurance (EDLI) Fund. The above-said 24% is the only amount you can claim at the settlement.

Good to know the basic details. It depends on the employee's contribution changes. The basic calculation is 12% of BASIC+DA from the employee, with an equal contribution from the employer. In such cases, the employee can contribute 24% directly from their BASIC+DA.

All the best for your future.

Thanks,
Jai

It's good to inquire about the remaining 1.61%. This portion, 1.61%, should be deducted from the employer's contribution. I recommend reading the PF Act of 1952, as it will provide useful information for you.

Breakdown of the 1.61% Contribution

Within the 1.61%, the breakdown includes administrative charges of 1.10%, EDLI (Employee Deposit Linked Insurance) charges of 0.50%, and administrative charges of 0.01% on EDLI.

Dear all, kindly assist me. As per the EPF Act, whatever PF is deducted from the employee, the same amount should be submitted by the employer. However, my employer deducted both my part of PF as well as his part of PF contribution from my salary. What action can I take against him to avoid such unnecessary deductions?