New Employee's Salary and PF Deduction: Are They Eligible for the EPS Scheme?

Hi all, I have a question: Someone joined today, and his salary is 30K, but PF is being deducted at Rs. 15,000. This employee was never a member of the EPS scheme. Will they be a member of the EPS Scheme or not? Please advise.

Hi, First, you need to specify whether the employee is a fresh appointment (i.e., he was not a member of EPF/EPS earlier). If he is a fresher and his salary is more than 15K as per the PF Act, he is not eligible for EPS (Pension scheme). The employer can contribute 12% of 30K, or the employer can contribute 12% of 15K (limit) towards EPF. Trust you are clear.

If he was not a member of EPF before he joined your establishment, it should be presumed that when he joined his previous establishment, his salary (PF qualifying salary) was more than Rs 15,000. As such, he was not entitled to be part of the Pension Scheme. However, that company did not declare him as an excluded employee but covered him under EPF and contributed the entire 12 percent of the employer's contribution to his PF along with his contribution without bifurcating it (employer's contribution of 12%) as 8.33% to the Pension fund and the remaining 3.67% to PF.

Now he has joined your establishment and declared (in Form 11) that he was a member of PF in his last establishment and provided the UAN. Based on this, you can also follow the same practice and contribute the entire 12 percent, being the employer's contribution, to his PF instead of splitting it between the Pension fund and Provident Fund at the respective rates.