Understanding PF Rules for Foreign Employees in India: Are You Covered?

Provisions for PF Applicability to Foreign Citizens in India

Is PF applicable for citizens of other countries employed in India? If so, can you guide me through the provisions and deductions for those who are covered under SSA and those who are not covered under SSA?

Thank you

Yes, PF is applicable to international workers. You can find all the information regarding this on http://www.epfindia.com.

Regards,
Vikram Trivedi
PF ESI Consultant
Mob: [Phone Number Removed For Privacy Reasons]

Yes, it is compulsory to contribute to PF contributions. However, remember that PF contributions should be made from both sides. If a foreign employee is related to Japan, then you must submit PF contributions based on both the Indian salary and the Japanese salary at 12%. An important point to note is that the salary should not be broken down into parts like BASIC, HRA, MEDICAL ALL., LTA, as it should only consist of Basic.

I only have knowledge about these points to assure you.

Thanks

Regards,

Clarification on PF Calculation for Expats

PF is not based on the basic salary but on the full salary paid to the expat, including allowances.

Please find the latest guidelines on PF issued by KPMG.

You must pay PF contributions for international workers drawing a salary in India and Indian currency. P.F. is calculated at 12% on the total salary, not just on basic + DA.

Regards,
VSN Raju
PF & ESI Consultant: [Phone Number Removed For Privacy Reasons]

PF has to be deducted for them also. 12% from them and Employer 12% has to be paid as it is. For example: His basic pay is 1,00,000. His 12% is 12,000/- then 3.67% & 8.33% has to be paid as 3,670 & 8,670 accordingly. We should not limit to Rs. 6,500/-

Regards,
Saravanan J

Why is the employer contribution in this regard only 12%, or is it 13.61% itself? How can an expat claim the amount if he's in India for only a few years and has to leave the country before retirement age, provided the constraint of not having an Indian bank account?

Thank you,

Edwin Thomas

Please note the following points for your reference regarding foreign workers/expats:

a) PF deduction is 12% from the employee and 12% + 1.61% from the employer.
b) The percentage, i.e., 8.33% and 3.67%, will be on an actual basis, meaning not limited to Rs. 6500.
c) Employees will not be able to withdraw the PF amount until the age of retirement/58 years of age.
d) Expats must have a single-headed salary structure.

Hope this meets your requirements.

Regards,
Chill HR

An employer pays expat employees through reimbursements as well. Rent can also be reimbursed. Does the value of reimbursement constitute their total pay for the purpose of PF deduction?