Understanding EPF Compliance and Salary Deductions: Statutory Limits Explained

Please clarify about the ceiling limit of PF. If the basic is 30,000, then we have to consider EPF wages as 15,000. The deductions will be as follows:
- 8.33% of 15,000 = 1,249.5
- 3.67% of 15,000 = 550
- Additional charges include 1.10% admin charges, 0.5% EDLI, and 0.01% inspection charges.

If the salary is 5,400, then the deduction will be based on that amount. I want to understand the PF contribution when the salary is above 15,000 and also when the salary is below 6,500. What should be done in such cases?

If the basic salary is 15,000/- or above, then you can restrict EPF contributions to the ceiling limit of 15,000/- only. If the employee is already a member of EPF, then you can contribute 8.33% of 15,000/- towards EPS and 3.67% on 15,000/- towards EPF.

For any new employee who does not have EPF in previous organizations or is a fresher, if their basic salary is above 15,000/-, then there is no diversion to EPS; the entire 12% of employer contribution shall be accounted towards EPF only. There is no EPS for those employees.

There is a small change in admin charges. Admin charges are revised to 0.85%, 0.5% EDLI, and 0.01% EDLI Admin charges remain the same.

If the basic salary is 5,400/-, then EPF is contributed on 5,400/- only. The calculation remains the same for both cases.

For any clarifications, you can reach me.

Regards

Thank you, sir. If the basic amount is 5400/-, why is the ceiling limit set at 6500-15000? I believed that if basic + DA is less than 6500, then those individuals would not be required to contribute to PF compliance.

There is no ceiling limit of 6500 - 15000. Earlier, the ceiling limit was 6500/-, and now it's increased to 15000/-, so you might have been confused.