can any body help me for why some organisation fix there pf 780?
From India, Pune
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From India, Pune
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If the salary is fixed at Rs. 6500 per month, then 12% (Rs. 780) of the basic will be deducted as Employee PF. Additionally, 8.33% of the employer's share will be remitted to the Pension Scheme. At the time of superannuation, the Government will also contribute a maximum of Rs. 541, which is equivalent to 8.33% of EPS. The remaining balance amount of 3.67% will be added to the PF contribution as the employer's share, or the amount left after remitting Rs. 541 (8.33%) will be added.
Thank you.
Regards
From India, Kumbakonam
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1189Thank you.
Regards
From India, Kumbakonam
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Dear Pragati,
If the salary is fixed at Rs. 6500 per month, then 12% (Rs. 780) of the basic will be deducted as Employee PF, and 8.33% of the employer's share will be remitted to the Pension Scheme. At the time of superannuation, the Government will also contribute a maximum of Rs. 541, equivalent to 8.33% of EPS. The balance amount of 3.67% will be added to the PF contribution as the employer's share, or the amount left after remitting Rs. 541, or 8.33%, will be added.
Towards EPS, the employer contribution is at 8.33%. For a salary of Rs. 6500, the contribution to EPS is Rs. 541. However, the contribution by the Government will be at 1.16%. For a salary of Rs. 6500, the contribution to EPS is Rs. 75.
Regards, Abbas.P.S
From India, Bangalore
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If the salary is fixed at Rs. 6500 per month, then 12% (Rs. 780) of the basic will be deducted as Employee PF, and 8.33% of the employer's share will be remitted to the Pension Scheme. At the time of superannuation, the Government will also contribute a maximum of Rs. 541, equivalent to 8.33% of EPS. The balance amount of 3.67% will be added to the PF contribution as the employer's share, or the amount left after remitting Rs. 541, or 8.33%, will be added.
Towards EPS, the employer contribution is at 8.33%. For a salary of Rs. 6500, the contribution to EPS is Rs. 541. However, the contribution by the Government will be at 1.16%. For a salary of Rs. 6500, the contribution to EPS is Rs. 75.
Regards, Abbas.P.S
From India, Bangalore
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The ceiling salary for EPF is Rs. 6500, i.e., the statutory obligation is to contribute up to this limit, and 12% of the above salary is Rs. 780. However, if the employer and employee wish, the contribution can be based on the actual salary in excess of Rs. 6500.
Regards, Abbas.P.S
From India, Bangalore
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Regards, Abbas.P.S
From India, Bangalore
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It cannot be fixed like that, Neha. Your basic pay, whatever they might have fixed, will result in the PF being Rs. 288/-, that's it. In other words, Rs. 2400/- per month is fixed as the Basic Salary for all of you in your company. I hope in your organization, increments and other benefits will be shown as some allowance.
From India, Kumbakonam
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From India, Kumbakonam
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ESIC Amendment and PF Slab Concerns
We refer to the news of the ESIC amendment in the slab, which was raised to a maximum slab of Rs. 15,000 instead of the earlier Rs. 10,000 from 01.05.2010. In this context, I would like to suggest increasing the PF slab as well, as the current PF slab has been Rs. 6,500 for a long time. Due to the global financial situation, it is very necessary to amend this slab because, at the time of retirement at the age of 58, an employee working in the private sector will receive a very nominal amount. It will be very hard for a person to support their family with the PF amount and pension amount they will receive as per the current slab.
As you are aware, inflation rates are on an upward trend, and the prices of all necessary items have increased steeply. How can an average middle-class Indian fulfill their basic requirements from the above PF amount when they retire?
I think the government should change the policy and take more effective actions, keeping in mind the long-term inflation rate. You can understand the critical position of a person retiring at the age of 58, especially private sector employees. The government should think about middle-class families. "Poor are becoming poorer day by day."
Expecting some amendments in the PF slab in the new fiscal year.
From India, Vadodara
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We refer to the news of the ESIC amendment in the slab, which was raised to a maximum slab of Rs. 15,000 instead of the earlier Rs. 10,000 from 01.05.2010. In this context, I would like to suggest increasing the PF slab as well, as the current PF slab has been Rs. 6,500 for a long time. Due to the global financial situation, it is very necessary to amend this slab because, at the time of retirement at the age of 58, an employee working in the private sector will receive a very nominal amount. It will be very hard for a person to support their family with the PF amount and pension amount they will receive as per the current slab.
As you are aware, inflation rates are on an upward trend, and the prices of all necessary items have increased steeply. How can an average middle-class Indian fulfill their basic requirements from the above PF amount when they retire?
I think the government should change the policy and take more effective actions, keeping in mind the long-term inflation rate. You can understand the critical position of a person retiring at the age of 58, especially private sector employees. The government should think about middle-class families. "Poor are becoming poorer day by day."
Expecting some amendments in the PF slab in the new fiscal year.
From India, Vadodara
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As per the latest amendment under the EPF Act, Rs. 6,500/- is the minimum basic salary from which PF contributions are to be made by both the employer and the employee. If a person's basic salary is Rs. 10,000/-, then the company should contribute to the PF for the minimum basic salary of Rs. 6,500/-, and this contribution is mandatory. It is optional for the company to contribute to the total basic salary, i.e., Rs. 6,500/-.
Therefore, 12% of Rs. 6,500/- is Rs. 780, which is deducted from the employee's salary, and the employer will also contribute the same amount.
Regards,
G.B. Mahendra Kumar
Fortune Hub - One-Stop Solution for Total HR Domain.
From India, Bangalore
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Therefore, 12% of Rs. 6,500/- is Rs. 780, which is deducted from the employee's salary, and the employer will also contribute the same amount.
Regards,
G.B. Mahendra Kumar
Fortune Hub - One-Stop Solution for Total HR Domain.
From India, Bangalore
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Understanding PF Contributions Under the EPF Act
As per the latest amendment under the EPF Act, Rs. 6,500/- is the minimum basic salary from which PF contributions are required from both the employer's and employee's sides. If a person's basic salary is Rs. 10,000/-, then the company should contribute to PF based on the minimum basic salary of Rs. 6,500/-, which is mandatory. It is optional for the company to contribute based on the total basic salary, i.e., Rs. 10,000/-.
Therefore, 12% of Rs. 6,500/- amounts to Rs. 780, which is deducted from the employee's salary, and the employer will also contribute the same amount.
Regards,
G.B. Mahendra Kumar
Fortune Hub - One Stop Solution for Total HR Domain
From India, Bangalore
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As per the latest amendment under the EPF Act, Rs. 6,500/- is the minimum basic salary from which PF contributions are required from both the employer's and employee's sides. If a person's basic salary is Rs. 10,000/-, then the company should contribute to PF based on the minimum basic salary of Rs. 6,500/-, which is mandatory. It is optional for the company to contribute based on the total basic salary, i.e., Rs. 10,000/-.
Therefore, 12% of Rs. 6,500/- amounts to Rs. 780, which is deducted from the employee's salary, and the employer will also contribute the same amount.
Regards,
G.B. Mahendra Kumar
Fortune Hub - One Stop Solution for Total HR Domain
From India, Bangalore
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Understanding EPF Deductions
As far as EPF is concerned, the components considered for deduction are basic salary + DA + food allowance (if any) or any undefined allowance, e.g., special allowance or others. Secondly, it is compulsory for those who are earning a basic salary up to Rs. 6500/- per month. Once you become an EPF member, the contribution can continue when it exceeds the ceiling. It depends on the employer whether they deduct the contribution based on the actual basic salary or Rs. 6500/-. The Rs. 6500/- is the ceiling for EPS (8.33%), EDLI (0.5%), and administrative charges (0.01%).
Thanks & regards,
Sumit Kumar Saxena
[Phone Number Removed For Privacy Reasons], [Phone Number Removed For Privacy Reasons]
From India, Ghaziabad
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As far as EPF is concerned, the components considered for deduction are basic salary + DA + food allowance (if any) or any undefined allowance, e.g., special allowance or others. Secondly, it is compulsory for those who are earning a basic salary up to Rs. 6500/- per month. Once you become an EPF member, the contribution can continue when it exceeds the ceiling. It depends on the employer whether they deduct the contribution based on the actual basic salary or Rs. 6500/-. The Rs. 6500/- is the ceiling for EPS (8.33%), EDLI (0.5%), and administrative charges (0.01%).
Thanks & regards,
Sumit Kumar Saxena
[Phone Number Removed For Privacy Reasons], [Phone Number Removed For Privacy Reasons]
From India, Ghaziabad
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First of all, I would like to substantiate here that the PF is a Social Security Benefit, which is one of the primary responsibilities of any employer as well as the state (country - we use state in the US). Any state has a legal responsibility to ensure a secure life extension plan for the statesmen. In order to achieve this, PF is a very relevant statutory requirement. As you know, there are always loopholes in any system to counter the same in adverse conditions. Many employers take advantage just to save on their own contribution, thus, 780/-.
It should be mandatory to deduct 12% of basic & employer's contribution to the same part to be deposited to the PF account. Then there is a proper system. As an ideal employer, all should follow this.
Regards,
Niky
From India, Indore
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It should be mandatory to deduct 12% of basic & employer's contribution to the same part to be deposited to the PF account. Then there is a proper system. As an ideal employer, all should follow this.
Regards,
Niky
From India, Indore
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As per the rules of the P.F. Act, the maximum limit for deduction is 6500. Hence, most employers deduct the P.F. up to 6500 even if they pay more than 6500 per month. However, it can be deducted more than 6500 with the consent of the employees, employer, as well as the P.F. department.
Regards,
Kuldeep Sharma
Advocate
From India, New Delhi
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Regards,
Kuldeep Sharma
Advocate
From India, New Delhi
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Hi Neha,
By reading the chain of replies on your query, I don't think you understand the reason behind fixing the EPF contribution up to Rs. 780.00. First of all, the higher limit of Rs. 780.00 is for only those employees who are earning a basic salary of more than Rs. 6500.00, and those who are earning a basic salary of less than Rs. 6500.00 are contributing on an actual basis.
Understanding EPF Contribution Limits
The reason is, as per EPF Rules, the upper limit for EPF contribution is Rs. 6500.00. According to EPF Rules, the employers and employees are mandatorily liable to pay EPF contribution on the basic salary up to Rs. 6500.00; anything above that is voluntary, they may contribute or they may not.
Taking advantage of these rules, employers are fixing the EPF contribution at only Rs. 780.00 for those employees whose basic salary exceeds Rs. 6500.00. With this, employers save costs for the company on employers' contributions, and employees are getting an increased take-home salary because they contribute less to the EPF.
Regards,
Ilyas Hungund
[Phone Number Removed For Privacy Reasons]
From India, Mumbai
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By reading the chain of replies on your query, I don't think you understand the reason behind fixing the EPF contribution up to Rs. 780.00. First of all, the higher limit of Rs. 780.00 is for only those employees who are earning a basic salary of more than Rs. 6500.00, and those who are earning a basic salary of less than Rs. 6500.00 are contributing on an actual basis.
Understanding EPF Contribution Limits
The reason is, as per EPF Rules, the upper limit for EPF contribution is Rs. 6500.00. According to EPF Rules, the employers and employees are mandatorily liable to pay EPF contribution on the basic salary up to Rs. 6500.00; anything above that is voluntary, they may contribute or they may not.
Taking advantage of these rules, employers are fixing the EPF contribution at only Rs. 780.00 for those employees whose basic salary exceeds Rs. 6500.00. With this, employers save costs for the company on employers' contributions, and employees are getting an increased take-home salary because they contribute less to the EPF.
Regards,
Ilyas Hungund
[Phone Number Removed For Privacy Reasons]
From India, Mumbai
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Hello, I am working with a BPO, currently receiving a salary of 15k per month. They are deducting only 120rs for PF and showing the basic salary as only 1000rs. Can anybody tell me if this is correct? Let me show you all those details:
Salary Breakdown
- BASIC: 1000/-
- ESIC: 193
- PT: 200
- HRA: 14000
- PF: 120
Total Earnings and Deductions
- TOTAL EARNING: 14000
- TOTAL DEDUCTION: 513
Is this right? Please reply.
From India, Pune
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Salary Breakdown
- BASIC: 1000/-
- ESIC: 193
- PT: 200
- HRA: 14000
- PF: 120
Total Earnings and Deductions
- TOTAL EARNING: 14000
- TOTAL DEDUCTION: 513
Is this right? Please reply.
From India, Pune
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Hi Abhijit K, Yes, the above-mentioned PF deduction is absolutely correct. The deduction of PF is based on the basic salary, not on the CTC. Your PF is deducted as 12% of the basic, i.e., 1000 * 12% = 120.
From India, Pune
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From India, Pune
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Just to evade taxes for the government and avoid or pay less on statutory requirements, some companies are behaving in such a manner. Company personnel must understand that their company's name is being damaged by these actions.
Understanding Basic Salary Percentage
The percentage of the basic salary can range from 35% to 100%, depending on the position, the salary-fixing method adopted by the company, the cadre, and the availability of manpower categories in the required designation.
From India, Kumbakonam
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Understanding Basic Salary Percentage
The percentage of the basic salary can range from 35% to 100%, depending on the position, the salary-fixing method adopted by the company, the cadre, and the availability of manpower categories in the required designation.
From India, Kumbakonam
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can u decrib me the PF amount will be Deidcting in a not gross salary PF Deducation in dedcut in Basic salary I m Right na
From India, Delhi
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From India, Delhi
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Rupesh, your point is very right, but until the government takes action for that, employees wishing to secure their future can contribute to the Voluntary Provident Fund as per their capacity. This would help them greatly in accumulating a good amount after their retirement, depending on the contribution made to the VPF.
Regards, Prasanth
From India, Mumbai
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Regards, Prasanth
From India, Mumbai
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Can you please suggest if an employee's basic salary is more than Rs. 6500, what will be the contribution of PF for employees? Would employees be covered under the PF scheme?
Regards,
Rajnish Kumar
From India, New Delhi
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Regards,
Rajnish Kumar
From India, New Delhi
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Hello Kumar Rajnish, can you please suggest to me if an employee's basic salary is more than Rs. 6500, what will be the contribution of PF for employees? Would employees be covered under the PF scheme?
PF Contribution for Salaries Above Rs. 6500
If the employee is not registered with PF, i.e., if he is a new hire, there is no statutory obligation. But if he is already registered, he has to continue with a statutory obligation up to a salary of Rs. 6500. If the employee and employer wish, there is no restriction to register with PF or contribute for higher salaries even if the salary exceeds Rs. 6500.
With regards,
Abbas P.S
From India, Bangalore
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PF Contribution for Salaries Above Rs. 6500
If the employee is not registered with PF, i.e., if he is a new hire, there is no statutory obligation. But if he is already registered, he has to continue with a statutory obligation up to a salary of Rs. 6500. If the employee and employer wish, there is no restriction to register with PF or contribute for higher salaries even if the salary exceeds Rs. 6500.
With regards,
Abbas P.S
From India, Bangalore
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No contribution on salary exceeding statutory limit under EPS 8.11.2013.pdf
SC Judgment-No obligation to excess contribution than Statutory Limit.docx
EPF - Pension contribution is zero WHY.jpg