Is My New Employee Eligible for PF Enrollment Despite Exceeding the Salary Ceiling?

Eligibility for PF Enrollment and Contribution

I have a query. Please guide me properly. I have hired a new employee in our company with an offered basic salary of 21,500/-, which exceeds the applicable PF limit. In his last employment, he was subscribed to EPFO.

Now, my query is: Is he eligible for PF enrollment in our company? If so, is our company liable to pay the employer's share towards PF contribution? If yes, on what amount should my company contribute towards the PF share - 15,000/- or the offered basic salary?

Are there any rules in the PF Act-1948 that address this situation? Please resolve my doubts.

Thanks

**Location**: Faridabad, India

Country-India, PF applicability, ceiling limit, provident fund calculation, payroll and statutory management, City-India-Faridabad, salary administration, provident fund consultants Delhi, salary and wages, salary and payroll, PF contribution, new employee, PF Act, payroll and statutory compliance.

PF Enrollment for New Employee Exceeding Ceiling Limit

In this scenario, where the new employee's offered basic salary exceeds the PF ceiling limit and they were previously subscribed to EPFO, certain considerations need to be addressed. Here's a practical guide to resolving your query:

1. Eligibility for PF Enrollment:
- The employee is still eligible for PF enrollment in your company, even though their basic salary surpasses the ceiling limit. The PF Act-1948 does not restrict enrollment based on the salary exceeding the limit.

2. Employer's Share Contribution:
- Your company is indeed liable to pay the employer's share towards the PF contribution for this employee. The employer's share is calculated based on the statutory requirements, not the employee's salary exceeding the limit.

3. Amount for Employer's Contribution:
- The employer's contribution towards PF should be calculated on the actual basic salary offered to the employee, which is 21500/-. This means the employer's share will be based on the offered salary, not limited to the ceiling amount.

4. PF Act-1948 Regulations:
- The PF Act-1948 does not specifically address this situation where the employee's salary exceeds the ceiling limit. However, it does not prohibit the enrollment or contribution based on this factor.

In conclusion, your company should enroll the new employee for PF, pay the employer's share based on the actual offered basic salary, and ensure compliance with the PF Act-1948 regulations. If you encounter any specific challenges or require further clarification, consulting with a provident fund consultant in Delhi or a payroll expert can provide tailored guidance for your situation.