Understanding PF Deduction for Salaries Above ₹15,000 and Employer Contribution Policies

Hi, I have recently joined an organization. In that organization, they have a policy of deducting employer PF on 15000 at 12%. Since my basic salary is more than 15000, I want the PF employer contribution to be on 20000 at 12%, with a similar amount as my contribution. Currently, my employer is ready to have my contribution as 12% of 20000 but is not willing to have the employer contribution on 20000. The reason given is that during the registration of the PF account, they chose the option to deduct 12% on 15000, and now it can't be changed.

One more point worth noting is that my CTC includes employer contribution as well, and I am prepared to have a reduced take-home salary. I want to understand if it is true that the employer can't change this. If not, how can I get it modified?

Thanks
Regards

Opt for Voluntary PF (VPF). Maybe this is the best thing you can do. It will be credited directly to the PF account only, not to the pension scheme, etc.

Dear Mr. Rajeev,

For an EPF member with a salary of more than Rs. 15,000, the statutory contribution to PF is Rs. 1,800. If the employee and employer wish, the contribution may be based on the actual salary, which is not statutory but optional. As Mr. Yugender Reddy Gavini posted, you may contribute voluntarily as you wish.

Abbas.P.S

Your employer is not bound to contribute on actual earnings but is limited to $15,000 only. However, you may contribute on actuals if you wish.

Adding to the above query, I want to know whether someone can revert to earlier contribution levels, even if their earnings cross the $15,000 limit after they have exercised the option of contributing on actual earnings. Could someone please clarify?

Employer's contribution of 12% of salary above Rs 15,000 per month is not a statutory obligation but an option for the employer. So, your employer is right.

Yes, either the employer or the employee can stop or reduce his voluntary contributions. The law requires that 12% of basic and DA be paid to a maximum of ₹1800. Beyond that, it's on the wish and fancy of each individual.

Even if your salary is on CTC, the law does not allow the reduction of gross salary to pay for PF. Therefore, the employer cannot increase his contribution and bring your take-home down. You can ask for the change in your next appraisal or simply increase voluntary contribution.

Dear Rajeev,

There is no obligation for the employer to give 12% on 20000/- as the ceiling limit is 15000/- as per the act. Only for the employee contribution, it may be on the actual basic (20,000 in your case) or on the ceiling limit of 15000/-.

CTC includes employer contribution as well; there is nothing wrong with that. Even if you are ready to have a reduced take-home salary, there is no obligation for the employer to contribute 12% on 20000/-.

I hope I clarified your doubt. Please let me know if you require any other clarification.

- Prathap Senior Executive-HR Narayana Health 8884291530

Dear Rajeev,

Warm greetings!

I agree with Mr. Saswata Banerjee. Opt for VDPF (Voluntary Deduction of PF) on your part only. Employer contribution is restricted to Rs. 1800 only. Please let me know if you need any further information in this regard.

Regards,
Pranab Chakraborty
9404384433

Dear Saswata ji,

With due respect to you, Sir, I have not understood the above-cited quote from you. I would be thankful if you could elaborate on the same.

While the employer is within his right to restrict his contribution to Rs. 15,000 only, what has been included as the employer's contribution to PF in your CTC? If it is on Rs. 15,000 as the employer is now deducting, you do not lose on that count. Please check.

A. S. Bhat

Dear sir,

My salary is 16500/-, but my basic + DA is less than 15000. Is it mandatory for me to deduct the EPF?

Regards,
Sukh Arora