Understanding PF Contribution Limits: Can Management Pay Up to 60k Basic + DA?

Hi,

Please advise. Management is ready to pay PF up to 60k basic + DA. Is it possible to go up to 60k? What is the maximum limit?

Regarding the pension amount: do we have to calculate based on 15k or 60k? If it's 15k, the remaining amount should be for PF.

Dear Madhale,

If an employee and employer wish, there is no limit to contribute to PF. After contributing to the pension fund with Rs. 15,000, the remaining amount will be paid to the PF account.

Abbas. P. S.

Dear Madhale,

Yes, if the total PF contribution (employee+employer) is Rs. 6000, after remittance of Rs. 1250 to the pension fund, the balance of Rs. 4750 will be paid to the PF account.

Abbas.P.S

Dear Madhale, As stated by Mr. Abbas, there is no limit for PF contribution. It is solely the management's decision and depends on your company's CTC structure. If the management agrees to pay the employer contribution on the salary beyond Rs. 15,000/- as well, you can deduct the employee contribution and deposit the same as the employer contribution. If the PF is a component of your CTC, in that case, you can also deduct a higher PF (the employer contribution will be included in CTC).

Moreover, covering the employees on the higher side is a great act for the Social Security System. I would also prefer to go for the same. However, if the PF is not a part of the CTC, you can restrict the PF deduction up to the Basic Salary of Rs. 15,000/- (PF-Rs. 1,800/pm). By doing so, the company can save a small part towards the employer contribution. If you have a huge number of manpower and most of them are on a small pay scale, you can opt for Restricted PF; this will increase take-home salary and save for the company as well.