Different Views on PF Coverage
There are different views in this case. First, if this is the first employment of the employee or if the employee had no PF account with his previous employment, then you can exclude him from the coverage of PF by treating him as an employee with a salary of more than Rs 15,000. If this decision is taken, you should collect Form 11, evidencing that he was not a member of EPF earlier.
Suppose the employer thinks that all employees should be covered by EPF irrespective of their eligibility, then you can cover him under EPF and not under the Pension Fund. Since he is a new employee having no previous or existing member ID, then legally he is not eligible for a pension, and hence the entire contribution payable by the employer should be made in EPF rather than bifurcating it as 8.33% to the Pension Fund and the remaining 3.67% to EPF.
Contribution for Existing Members
Now, if he is an existing member, then he should be covered invariably. The contribution shall be decided as follows:
1. The employee can contribute either 12% of the actual salary, i.e., Rs 17,970, or 12% of Rs 15,000.
2. The employer can contribute either an equal amount, i.e., 12% (8.33% + 3.67%) of the actual salary, i.e., Rs 17,970, or 12% of Rs 15,000. This is a policy decision to be taken by the employer. If the employer is ready to contribute on the actual salary, then he should contribute 12% of Rs 17,970, i.e., Rs 2,157 in total, of which the contribution to the Pension Fund should be 8.33% of Rs 15,000 or Rs 1,250, and the balance Rs 907 should be contributed to his PF account.