PF Deductions for Salaries Over Rs 15,000: What Are the Rules and How Should I Proceed?

PF Deductions for Employees Earning Above Rs 15,000

My name is Anup Ojha, and I am currently working with a construction company. I have some concerns regarding PF deductions. What should I do when an employee earns more than Rs 15,000 per month? Is it necessary to deduct the PF in such cases, and if not, how should I proceed with the PF deduction for them?

Thank you.

Generally, the salary for PF deduction means Basic + DA only. For those already registered for PF, salary doesn't matter. In the case of fresh joining, those drawing a salary up to Rs. 15,000 will come under PF. The above statement is regarding statutory obligations. If the employee and employer wish, there is no restriction on the salary to contribute to PF.

Regards,
Abbas.P.S

I would like to understand how to calculate the PF deduction when an employee earns a salary ranging from Rs. 30,000 to Rs. 40,000. Could you provide an example to illustrate this calculation and show where this amount should be reflected in the salary sheet according to company regulations?

Dear Anup,

1) If the PFable salary at the time of joining is Rs. 15,001 or more per month, you do not need to cover them.

2) In the second category, if the basic salary (plus DA if your company is paying) is less than Rs. 15,000 per month, then employees should fall under the PF limit.

3) If employees have been working with your company for many years and their PFable salary exceeds Rs. 15,000 monthly, they will be under the PF coverage.

4) If an employee has been with your organization for several years and was previously under PF coverage, and with yearly salary increases, their PF salary now exceeds Rs. 15,000 per month, you must continue to cover them under PF.

Regards,
RDS Yadav
Management Consultant and Trainer
[Phone Number Removed For Privacy Reasons]

Dear all,

First of all, Happy New Year to all! Please help. My company has started the PF procedure this month, and I need to inform all employees in writing (formal information) about PF deduction. PF was already deducted in December. Can you please help me with the format for the circular so that I can distribute it to the team?