Employer Contribution to PF: Can It Be 1800 p.m. with This Salary Breakdown?

Employer Contribution to PF

What should the employer contribution to PF be if the salary break-up is as follows:

Basic Pay: 121,667 p.m.
House Rent Allowance: 60,834 p.m.
Leave Travel Allowance: 1,250 p.m.
Special Allowance: 118,616 p.m.

Can it be 1800 p.m. given the above salary break-up?

EPF Wage Limitations

EPF wages should be less than 15k. Above 15k, you can exclude the employee from EPF. If the employee has been a member previously, then they must continue with EPF contributions.

Voluntary EPF Contributions

For voluntary EPF contributions, the employer and employee need to submit a joint application for increased EPF contribution. However, the employer is not under any obligation to pay their contribution for more than 15k.

Thank you for the response. I am not sure I understand the explanation well. Isn't the employer contribution also 12% of Basic just as the employee would make to EPF? Which rule is this where the employer is not obligated to pay his contribution for more than 15K? For context, the employer here is a large MNC.

The PF Act is applicable to employees with a salary up to Rs. 15,000 per month. Once a person is a member of PF, they remain a member of PF forever as long as they are employed, even if their salary exceeds Rs. 15,000 per month.

In the case of a salary exceeding Rs. 15,000 per month with no previous PF membership, it is not mandatory to admit the individual under PF. You can admit them under PF with a joint declaration. In this scenario, you have the option to restrict their contribution to Rs. 15,000 or contribute based on their actual salary with a joint declaration.

In your situation, if the employee already has PF membership from previous employment, you must admit them as a PF member. You can restrict the contribution to Rs. 15,000 per month or contribute based on their actual salary by obtaining a joint declaration.

If the employee is not a previous PF member, you have the choice to admit them as a PF member or not. If you choose to admit them, you can restrict the contribution to Rs. 15,000 per month or contribute based on their actual salary by obtaining a joint declaration.

Regarding the Pension scheme, if the employee was not a member of PF and EPS earlier and is now contributing to PF with a salary exceeding Rs. 15,000 per month with you, then you must exclude them from EPS.

Form 11 is a very important document to determine all these details.

Employer's Obligation for EPF Contribution

The employer is not under any obligation to pay the EPF contribution beyond the specified maximum ceiling of basic wages, which is ₹15,000. However, any employee can contribute to the EPF on higher basic wages beyond the ₹15,000 limit. For this, both the employee and the employer must apply jointly to the EPF commissioner and obtain approval.