Government Raises EPF Wage Ceiling: What Does This Mean for Your Paycheck?

Government Notification on EPF Wage Ceiling Enhancement

The government notification related to EPF - Enhancement of wage ceiling has been published. Please find attached a copy of the same. This shall come into force on and from the 1st day of September 2014.

Regards

In case, do we need to revise all the employees' salaries? My doubt is, as of now, we go ahead with restricted wages of 780/- deduction for those whose basic is more than 6500/-, and if less than the ceiling, we calculate 12% on basic.

Let me correct, now we have to take the ceiling as 15K as the base. If more than that, do we need to fix the standard deduction of PF as 1800 (12% on 15K) and less than that depends on basic * 12%.

Please clarify.

Clarification on EPF Contributions

Please clarify whether, under the EPF Act, the employer can reduce contributions from the Basic Salary (as defined in the act) of Rs. One lakh per month to Rs. 15,000, as per the provision of the Act.

The organization currently deducts and contributes based on the Basic Salary regardless of the amount (Rs. 50,000 per month to Rs. 1.50 lakh per month). It now intends to deduct and contribute only up to Rs. 15,000 as stipulated in the act for all employees.

Is it permissible under the Act to do so? Please clarify.

Thanks & Regards