Understanding PF Deductions: Is It Based on Full Salary or a Fixed Amount?

sugarcoated15

Dear all, please let me know if the basic salary of an employee is more than 6,500 Rs (let's say 8,000 Rs), will their PF amount be deducted on 8,000 Rs (i.e., 12% of 8,000) or will it be a flat rate based on 6,500 Rs?

Thanks
Regards

abbasiti

The statutory requirement is on the ceiling limit. However, if the employee and employer wish, the contribution can be based on the actual salary.

Regards,
Abbas. P.S.

fc.vadodara@nidrahotels.com

I echo Abbasiti; the statutory requirement is on the ceiling limit of Rs. 6,500/-, but if the employer and employee wish to contribute based on the actual Basic of Rs. 8,000/-, they can do so. There is no harm in it.

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