Hi everyone, could you help me understand the percentage for PF deduction in any company? I would like to know more about PF deductions as we are planning to implement PF from next month in our company. Kindly provide me with information about PF deductions.
Thanks & Regards,
Mrudula
From India, Hyderabad
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7Thanks & Regards,
Mrudula
From India, Hyderabad
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Hi Mrudula,
Understanding PF Contributions
PF is a both-side contribution, meaning that the employer contributes 12% of basic + DA. This is wholly the employer's contribution and is to be paid out of the company's expenses.
Employer Contributions
Above the 12% contribution that goes to the PF and Pension Account (8.33% to the Pension fund and 3.67% to the PF fund), the employer is required to pay admin charges on the PF account and also pay a percentage on the insurance policy.
Employee Contributions
The employer deducts the employee's contribution from his/her salary. The employee is to contribute a minimum of 12% of basic + DA, and he/she can voluntarily increase his/her share up to a maximum of 20%. The whole of the employee's contribution goes to the PF fund.
Coverage Under the PF Act
Also note that a company is covered under the PF Act once it employs more than 20 employees. Even if the employment at a later stage drops below 20, the firm is still said to be covered under the PF Act once it is covered.
Similarly, an employee can be covered under the PF Act only if his/her basic + DA is less than 6500. However, if he/she gets an increment, he/she is still covered under the PF Act, and the contribution is to be made on 6500. Once an employee is covered under the PF Act, he/she continues to be covered even if he/she changes employment unless the new employment is not covered under the PF Act.
For more clarifications, you can visit the following discussions:
https://www.citehr.com/232866-provid...pf-number.html
https://www.citehr.com/455974-no-emp...f-company.html
Regards,
From India, Mumbai
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Understanding PF Contributions
PF is a both-side contribution, meaning that the employer contributes 12% of basic + DA. This is wholly the employer's contribution and is to be paid out of the company's expenses.
Employer Contributions
Above the 12% contribution that goes to the PF and Pension Account (8.33% to the Pension fund and 3.67% to the PF fund), the employer is required to pay admin charges on the PF account and also pay a percentage on the insurance policy.
Employee Contributions
The employer deducts the employee's contribution from his/her salary. The employee is to contribute a minimum of 12% of basic + DA, and he/she can voluntarily increase his/her share up to a maximum of 20%. The whole of the employee's contribution goes to the PF fund.
Coverage Under the PF Act
Also note that a company is covered under the PF Act once it employs more than 20 employees. Even if the employment at a later stage drops below 20, the firm is still said to be covered under the PF Act once it is covered.
Similarly, an employee can be covered under the PF Act only if his/her basic + DA is less than 6500. However, if he/she gets an increment, he/she is still covered under the PF Act, and the contribution is to be made on 6500. Once an employee is covered under the PF Act, he/she continues to be covered even if he/she changes employment unless the new employment is not covered under the PF Act.
For more clarifications, you can visit the following discussions:
https://www.citehr.com/232866-provid...pf-number.html
https://www.citehr.com/455974-no-emp...f-company.html
Regards,
From India, Mumbai
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I would suggest that instead of gathering complete information about the implementation of the EPF Act from others who may provide information in piecemeal, it would be better for you to contact the local PF office and implement the Act provisions as per legal requirements to avoid any complications later on. Additionally, browsing the EPFO website can save time and provide exact information on other statutory provisions to be implemented after coverage. Any specific queries can be resolved through these channels.
Regards,
Chandok AK RPFC (Retd.) [The link provided no longer exists]
From India, Chandigarh
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Regards,
Chandok AK RPFC (Retd.) [The link provided no longer exists]
From India, Chandigarh
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