Understanding PF Deduction and Employer Contributions under EPF Act

Hi, I am working in a company which is very small with around 300 employees. Currently, the management does not have any HR policies in place.

I would like to know if we deduct the minimum PF, which I believe is 768 (please correct me if I'm wrong), what will be the employee contribution considering that the basic salary will not be counted in it.

Note:
1) Only the minimum PF deduction is done from the employee's salary.
2) What will be the employer's contribution?

You are having the strength of 300 employees. But you don't have the PF Registration done. Immediately go to the Regional PF Office of your region and approach the enforcement officer. Whatever the salary of the employee, consider their basic pay as Rs. 6500/- and start deducting the PF and remitting the same after obtaining the PF Regn Code for your company.

Please refer to the Employees Provident Fund Act, which is available on this site, and proceed accordingly.

Total Provident Fund contribution is 25.61% (Rs.1664.65/-) for a maximum of Rs.6500/- as BASIC+ DA.

By Employee (Rule 10): Purpose % in Rs

PF is 12%, i.e., Rs.780/-

Total: 12%, i.e., Rs.780/-

By Employer (Rule 11): Purpose % in Rs

Provident Fund is 3.67%, i.e., Rs.238.55/-

Pension Fund is 8.33%, i.e., Rs.541.45/-

PF admin charge is 1.10%, i.e., Rs.71.5/-

EDLIS is 0.50%, i.e., Rs.32.5/-

EDLIS admin charge is 0.01%, i.e., Rs.0.65

Total: 13.61% is Rs.884.65/-

Grand Total: 12% + 13.61% = 25.61%

780 + 888.65 = Rs.1664.65/-

From 22nd September 1997, all establishments employing 20 or more persons are brought under the purview of the Act from the very date of setup, subject to the fulfillment of other conditions.

The Act does not apply to certain establishments as specified under Section 16 of the Act. Please check with the Act to determine if your establishment comes under the purview of the EPF Act. Most establishments fall under its purview.

Presently, an employee at the time of joining employment and receiving wages up to Rs. 6500/- is required to become a member. Now, an employee is eligible for membership of the fund from the very first date of joining a covered establishment.

The current rate of contribution is 12% by the employer, 0.5% towards E.D.L.I. contribution, and 1.15% towards administrative charges.

The employee has to contribute 12% separately, which can be deducted from the employee's wages.

If your company started approximately three years ago, you may have to pay arrears subscription for the previous period, which could amount to a significant sum due to interest and damages charged. Please consult a proper adviser to avoid substantial payments.