Provident Fund Wage Ceiling Increase: How Does This Affect Your Contributions?

Provident Fund Wage Ceiling Amendment

Please find attached the PF amendment circular dated 14/07/2014 regarding the enhancement of the Provident Fund Wage Ceiling from Rs. 6,500/- to Rs. 15,000/-. This is for your kind information.

Thank you.

Regards

Hi, we still need to wait for the final notification to come. This is only an amendment and enhancement on the wage ceiling.

Thanks, Mr. Ganesh, for the update. Going by the circular attached by Mr. Ganesh, it's reliably known that EPFO is on track to issue the necessary notification. In all probability, it's going to be with prospective effect only. Therefore, all the employers and employees may start working out the financial implications respectively.

Regards

Thanks for the circular uploaded. However, the circular is internally issued from department to department, so please do not misguide the employers.

Note for Employers

Employers should wait until notifications are issued by the local concerned regions.

Thank you.

As per the new notification, what would be the PF deduction from the employee if his Basic + DA is INR 17,000? Please confirm.

Regards,
Vinod Krishnadas

Thanks, Ganesh. The Finance Minister also increased the minimum EPF pension to ₹1000. If anyone comes across the notification on the minimum pension, please share it on this forum.

EPFO Members to Get Portable Universal Account Number (UAN)

The Labour Ministry informed the Lok Sabha yesterday that all active contributors of the EPFO will receive a portable Universal Account Number (UAN) very soon, preferably by 15th October 2014. This UAN portability will be effective throughout the working career of the EPFO member and can be used anywhere in India.

Attached herewith is the news article for reference.

Thanks,

Anil Sharma

Can anyone clarify for me how our net salary is affected by the increase in EPF wages to ₹15,000? Will the employee suffer in terms of their take-home salary or not? Please provide a clear explanation.

Once the PF ceiling is raised from Rs 6,500 to Rs 15,000 per month, as per the notification to be issued by the PF department soon, the employee whose salary is Rs 17,000 per month (Basic & DA) will have the PF deduction from both the employee and employer based on Rs 15,000 per month at 12% and 13.61% respectively. Therefore, the total contribution (25.61%) will be deposited, amounting to Rs 3,842 per month. Hope this is clear to you.

Regards

As per my information, this is the proposed ceiling figure that needs approval by the Rajya Sabha, the Upper House of the Parliament of India, followed by the President's approval too. Correct me if I am wrong.

UAN Allotment for EPF Members

Now, UANs are allotted to all EPF members by the PF Department. You can check the UANs of all your employees through your EPFO login. EPFO has issued a notice for all employers, which is attached here. The complete process is available on the EPFO website.

Thank you.

Thank you for the update regarding the enhancement of the PF deduction limit up to Rs. 15,000. We will have to wait for the notification on this matter.

Regards,
Sudhir Bhardwaj

Ways to Address Concerns About PF Deductions

To address this issue effectively, organizations can consider implementing the following strategies:

1. **Transparent Communication:** Clearly communicate the reasons behind the PF deductions and how they benefit employees in the long run.

2. **Provide Salary Reviews:** Conduct regular salary reviews to ensure that employees' compensation is fair and competitive.

3. **Offer Non-Monetary Benefits:** Provide additional perks such as flexible work arrangements, professional development opportunities, or health benefits to enhance overall employee satisfaction.

4. **Employee Engagement:** Foster a positive work environment where employees feel valued and engaged, reducing the focus solely on salary concerns.

5. **Education and Awareness:** Educate employees about the importance of PF contributions and how they contribute to their financial security post-retirement.

By implementing these measures, organizations can mitigate concerns related to PF deductions and promote a more harmonious work environment.

Dear Senior,

As we all know, if an employee's count exceeds 19, PF registration is essential. However, if our employee count is 14 and we are going to do business with any agency, then we require the PF number. What will be the procedure for PF registration? Your reply is essential for me.

Thank you.

Hi, your question is whether, with a staff strength of 14, you are required to get registration under the PF Act. You have also informed that your company is going to do business with an agency.

As far as your company is concerned, you do not require PF registration under the PF Act since the total strength is less than 20.

Now let me address your second point. It is clear that you are going to deal with an agency business. In that case, you will be appointed by the principal company to work on their behalf dealing with agency business.

If the principal company is covered and has registration under the PF Act, they will insist that you obtain PF registration for your company. Furthermore, I would like to add that PF registration can be taken voluntarily by your company even if the number of staff members is less than 20.

Instead of obtaining PF registration, if the principal company agrees to deposit PF contributions on behalf of your staff members, then it will be acceptable. The amount of PF contribution deposited by the principal company will be deducted from your bill. Please take note of this.

Ultimately, the decision lies with the principal company.

Regards,

No notification in this regard has been issued by the EPF department, so the effective date is not known. EPFO is working on preparatory activities. Please wait for the notification. In my estimate, the ceiling limit may be Rs. 15,000/- on the gross monthly salary (including all components) instead of the current ceiling limit of Rs. 6,500/- (Basic+D.A). I hope it will be effective from 01.04.2014, or the notification will be declared shortly.

Best Regards,
Mohan Nair.

I believe only enrollment up to 15,000 may be actioned. However, the contribution limit may not be raised much beyond $6,500. It will lead to the government facing a lot of resistance from employers.

Thank you.