Understanding PF Deductions: Can Employees Opt Out for Full Salary in Hand?

As per the notification, the PF has to be deducted for the employees whose "basic" is up to ₹15,000. Is this the right interpretation?

Also, in relation to the same, there's an employee who says that he doesn't want to have his PF deducted and wants his salary in hand. He's currently drawing ₹22,000, and his basic is ₹11,000. The organization has been deducting his PF so far. Is it possible to stop the PF deduction now and take some written notification from the employee to not deduct PF?

Looking forward to a prompt response on how I can assist the employee in receiving their full salary in hand.

Your interpretation for the deduction of Basic up to ₹15,000 is correct, and there have been some changes in that. If any employee has PF contributions and, due to an increment in their salary, the basic salary exceeds ₹15,000, you should still contribute PF up to the ceiling limit of ₹15,000.

If an employee is already contributing to PF, they cannot opt for exemption, even if the basic wages are above ₹15,000. If any employee is drawing basic wages below ₹15,000, then it is mandatory to contribute.

Please let me know if you need further clarification.

Thank you.

Dear All, Please take note that any employee who joined on or after 1.9.2014 and is drawing Basic + DA exceeding Rs. 15,000/-, and does not have PF membership from previous employment, if such an employee joins as a member of PF, then their employer contribution will not be diverted to Pension contribution. The EPFO does not intend to extend pensionary benefits to a new group of employees drawing Basic + DA more than Rs. 15,000/- per month.

Understanding Basic Criteria in PF

What is the basic criterion for the Provident Fund (PF), and are there any new amendments related to the PF and revisions in basic (60%) related to PF?

With effect from 1st September 2014, the PF ceiling has been raised from Rs 6,500 per month to Rs 15,000 per month (Basic, DA, and Retention Allowance). So, you are correct in your interpretation that PF contribution shall be deducted from the salary of an employee who is earning not more than Rs 15,000 per month.

Regarding your second query, you should continue to deduct PF contribution from the salary of the employee earning a basic of Rs 11,000 per month. Since he is covered under the PF Act, he cannot be exempted at this stage from paying PF contribution.

Please let me know if you need any further clarification.

Thank you.

Clarification on PF Deductions and Salary Structure

Please clarify if someone is receiving a salary of ₹22,000/- with a basic pay of ₹11,000/-, and currently, PF is not applicable to him. Starting from September 2014, the company management increased his basic pay from ₹11,000/- to ₹16,000/- while keeping the gross salary at ₹22,000/- to avoid PF liability. Please provide guidance on what steps the employee can take so that PF deductions can also be made.

Thank you.

Thank you for all the responses here. I understand that the employee will have to have their PF deducted, as it has already been deducted, even if their basic pay now exceeds ₹15,000.

Please clarify whether an employee who is a member of the PF scheme prior to 1/9/2014 has the option of having PF deduction only up to ₹6,500.

Regards,
Sharad

Dear all, I have a question to raise. We have an employee who used to draw a salary of Rs. 12,000/- earlier. Now, after the appraisal scheme, his salary is Rs. 14,000/- per month. Is he liable for "PF" deduction?

Regards,
Gaya