Is My Employer's PF Contribution Correct if It's Less Than My Basic Salary?

Hi Seniors,

An employee is earning a basic salary of Rs. 20,000, and the company is deducting 12% of basic, i.e., Rs. 2,400.

Regarding employer contribution, they are ready to pay 12% of PF on Rs. 15,000, i.e., Rs. 1,800 only.

Kindly confirm whether the employer has to pay PF on the actual basic or Rs. 15,000, which is lesser than the actual basic.

Thanks & Regards

Dear Friend,

After the recent amendments in the PF, it became mandatory for the employers to deduct Rs. 1800/- only from the basic salary of Rs. 15000/-. There is no need to deduct from Rs. 20,000/-; however, if the employer is interested in contributing more, they can deduct from Rs. 20,000/-.

Previously, the ceiling limit was Rs. 780/- on Rs. 6500/- as basic. Now, the ceiling limit has increased to Rs. 1800/- on Rs. 15000/- as basic.

Thanks.

The structure you are following is the correct one. Employer does not need to contribute more than the statutory limit of ₹1800 per month