How Can I Lower PF Deductions for My Employees by Adjusting Salary Components?

Dear seniors, Please help me with PF. I have many workers in my organization who have nearly ₹1800 PF deduction every month. Can I reduce this deduction by changing the salary component? If yes, then how?

Yes, you can reduce the PF deduction amount. First, you have to show their basic salary as less than 15k, which helps in reducing the PF amount.

This is not straightforward mathematics. As per the PF Act, it is not possible to reduce the salary to bring down PF contributions. However, it is possible if the organization is paying PF contributions above the statutory limit, i.e., above 15k per month. It is not allowed to decrease the salary below 15k per month or below the actual salary, which is already below 15k per month.

S K Bandyopadhyay (WB, Howrah)
CEO-USD HR Solutions
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