New Company Setup: Is PF Contribution on Full Wages Mandatory or Capped at INR 15,000?

iswadi-zainuddin

Dear All,

We are a new setup company as of April 2023. Is it mandatory for employers to contribute PF on 12% of actual wages, instead of capping at INR 15,000?

Thank you.

vmlakshminarayanan

Hi, The statutory requirement is 12% on Rs. 15,000/- only. The employer contributes 12%, and the employee also contributes 12%. However, the employer and employee, on mutual consent, may contribute on actual PF wages as well, but this is not mandatory.

pdteraiya

It's not mandatory to contribute 12% of the entire basic. The statutory limit is 15K, so you are supposed to contribute a maximum of 1800. As per the Supreme Court decision, PF-able wage will include a few components other than Basic.

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