Is the employer bound to pay his share of PF if the basic salary of an emplloyee exceeds 6500/- p.m.? What else, if it exceeds 6500/-p.m?
From India, New+Delhi
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2From India, New+Delhi
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No,the Employer in not bound to pay. But the employer can contribute the admin charges.
From India, Kolkata
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From India, Kolkata
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If the employee is already registered with EPF, the PF contribution must continue even if the salary exceeds Rs. 6,500. However, the statutory obligation on such contributions will be restricted to Rs. 6,500. If the employer and employee wish, the contribution can be based on the actual salary.
Regards,
Abbas.P.S
From India, Bangalore
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Regards,
Abbas.P.S
From India, Bangalore
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Dear Abbas i want to know one question, if an employee basic salary is 6500/- above by the time of joining is it obligatory to deduct the PF? Kindregards Gowri sankara rao
From India, Visakhapatnam
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From India, Visakhapatnam
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Dear Gowri, If the employee fixed basic salry is 6.5 or above its not mandatory to dedcut the pf. Regards, Jaya
From India, Bangalore
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From India, Bangalore
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Dear Abbas, If basic is less than 6500 then which figure should consider for PF calculation. Sushant
From Hong Kong
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From Hong Kong
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That's not the question. The query is whether an employee's salary is more than 6.5 at the time of joining, and he wishes for his EPF to be deducted. In that scenario, is the employer obligated to pay his share of EPF contribution, i.e., 8.33 EPS and 3.67 in EPF? Please clarify this for me.
From India, New+Delhi
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From India, New+Delhi
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Applicability of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952
The Employees' Provident Funds and Miscellaneous Provisions Act, 1952, is applicable to every establishment with 20 or more employees. Under Section 5 of the Act, the Central Government may frame a scheme called the Employees Provident Fund Scheme for the establishment of a Provident Fund under the above-mentioned Act.
Definition of Excluded Employee
According to Para 2(f)(i) of the Employees Provident Fund Scheme, an employee whose pay (Basic Wages with Dearness Allowance, retaining allowance, and cash value of food concessions admissible thereon) at the time he is otherwise entitled to become a member of the fund exceeds Rs. 6,500/- per month is an "excluded employee" and is not required to be a member of the fund. Otherwise, an employee who does not meet the criteria of an "excluded employee" shall be entitled to and required to be a member of the fund as per Para 26(1)(a) of the Employees Provident Fund Scheme.
Enrollment of Employees Exceeding Rs. 6,500/-
As per Para 26(6) of the Employees' Provident Funds Scheme, an Officer not below the rank of an Assistant Provident Fund Commissioner may, on the joint request in writing of any employee of the factory or other establishment to which this Scheme applies and his employer, enroll such an employee as a member or allow him to contribute on more than Rs. 6,500/- of his pay per month if he is already a member of the Funds. Thereupon, such an employee shall be entitled to the benefits and shall be subject to the conditions of the Fund, provided that the employer gives an undertaking in writing that he shall pay the administrative charges payable and comply with all statutory provisions in respect of such an employee.
Conclusion on Excluded Employees
In light of the above provisions, "excluded employees" under Para 2(f)(i) of the Employees Provident Fund Scheme are not required to be members of the Fund and thereby pay PF contributions. Therefore, an establishment can have employees for whom the Company pays Provident Fund contributions and those for whom it does not. Finally, no separate declaration from an employee, whose salary is over and above Rs. 6,500/-, needs to be taken for not paying contributions towards the Provident Fund.
From India, Mumbai
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The Employees' Provident Funds and Miscellaneous Provisions Act, 1952, is applicable to every establishment with 20 or more employees. Under Section 5 of the Act, the Central Government may frame a scheme called the Employees Provident Fund Scheme for the establishment of a Provident Fund under the above-mentioned Act.
Definition of Excluded Employee
According to Para 2(f)(i) of the Employees Provident Fund Scheme, an employee whose pay (Basic Wages with Dearness Allowance, retaining allowance, and cash value of food concessions admissible thereon) at the time he is otherwise entitled to become a member of the fund exceeds Rs. 6,500/- per month is an "excluded employee" and is not required to be a member of the fund. Otherwise, an employee who does not meet the criteria of an "excluded employee" shall be entitled to and required to be a member of the fund as per Para 26(1)(a) of the Employees Provident Fund Scheme.
Enrollment of Employees Exceeding Rs. 6,500/-
As per Para 26(6) of the Employees' Provident Funds Scheme, an Officer not below the rank of an Assistant Provident Fund Commissioner may, on the joint request in writing of any employee of the factory or other establishment to which this Scheme applies and his employer, enroll such an employee as a member or allow him to contribute on more than Rs. 6,500/- of his pay per month if he is already a member of the Funds. Thereupon, such an employee shall be entitled to the benefits and shall be subject to the conditions of the Fund, provided that the employer gives an undertaking in writing that he shall pay the administrative charges payable and comply with all statutory provisions in respect of such an employee.
Conclusion on Excluded Employees
In light of the above provisions, "excluded employees" under Para 2(f)(i) of the Employees Provident Fund Scheme are not required to be members of the Fund and thereby pay PF contributions. Therefore, an establishment can have employees for whom the Company pays Provident Fund contributions and those for whom it does not. Finally, no separate declaration from an employee, whose salary is over and above Rs. 6,500/-, needs to be taken for not paying contributions towards the Provident Fund.
From India, Mumbai
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Thank you, Navalkardeepti. It's useful, but my question is, if an employee whose basic salary is more than ₹6,500 wants to contribute to EPF, is the employer bound to pay the employee's share of the contribution, i.e., EPF 3.67% and EPS 8.33%? Please clarify for me.
From India, New+Delhi
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From India, New+Delhi
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no , There is a number of judgment . employer is only bound to pay his share of contribution only prescribed limit
From China, Beijing
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From China, Beijing
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ok thnxxxxxxx sir but someone tell me that employer isnt bound and tell him the same. so that i m looking for any notification any way thnx sir for helping me.
From India, New+Delhi
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From India, New+Delhi
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This is in reference to the conversation above regarding the employer's Provident Fund (P.F.) liability for employees receiving a salary higher than the P.F. threshold. I would like to present my views on this matter as follows:
Employee Membership in the Employees' Provident Fund (E.P.F.)
An employee becomes a member of the Employees' Provident Fund (E.P.F.) upon joining if their monthly salary, inclusive of Basic and Dearness Allowance, is Rs. 6000 or more. The employee will continue to be a P.F. member even if their salary exceeds the P.F. threshold, and the employer will only contribute based on Rs. 6500 or as outlined in the "Standing Orders."
Employer's Contribution Obligation
However, the employer is not obligated to contribute to the P.F. share for excluded employees who joined the organization at a salary of Rs. 7000 per month (Basic+DA). This policy applies uniformly to all employees meeting the specified criteria. There are no exceptions made for any individual.
Thanks & Regards,
Deepak Behl
From India, Kolkata
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Employee Membership in the Employees' Provident Fund (E.P.F.)
An employee becomes a member of the Employees' Provident Fund (E.P.F.) upon joining if their monthly salary, inclusive of Basic and Dearness Allowance, is Rs. 6000 or more. The employee will continue to be a P.F. member even if their salary exceeds the P.F. threshold, and the employer will only contribute based on Rs. 6500 or as outlined in the "Standing Orders."
Employer's Contribution Obligation
However, the employer is not obligated to contribute to the P.F. share for excluded employees who joined the organization at a salary of Rs. 7000 per month (Basic+DA). This policy applies uniformly to all employees meeting the specified criteria. There are no exceptions made for any individual.
Thanks & Regards,
Deepak Behl
From India, Kolkata
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I think different matters are being mixed up, causing you a lot of confusion. The law requires the employer to pay their share of contribution of 12% plus administration charges on the actual salary subject to a salary ceiling of Rs. 6500 per month. Where the salary exceeds Rs. 6500 per month, the PF contribution will be computed as if the salary is Rs. 6500 per month. (Here salary means basic + DA only)
If an employee joins the employment at a salary of more than Rs. 6500 (joining salary) and does not have a previous active PF account, then the employee has an option of intimating to the employer that they wish to be exempt from PF. Only in such cases, the employer is exempt from their contribution. In all other cases, they have to pay the same.
From India, Mumbai
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If an employee joins the employment at a salary of more than Rs. 6500 (joining salary) and does not have a previous active PF account, then the employee has an option of intimating to the employer that they wish to be exempt from PF. Only in such cases, the employer is exempt from their contribution. In all other cases, they have to pay the same.
From India, Mumbai
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Employer Contribution to PF on Wages Exceeding Rs 6500
Employers need not contribute on wages exceeding Rs 6500 per month. Their contribution is limited to 13.61% of Rs 6500.
It is not the judgment or "standing orders" that prescribe this. It is paragraph 26-A(2) of the PF scheme that limits the employer's contribution.
Regards,
Varghese Mathew
[Phone Number Removed For Privacy Reasons]
From India, Thiruvananthapuram
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Employers need not contribute on wages exceeding Rs 6500 per month. Their contribution is limited to 13.61% of Rs 6500.
It is not the judgment or "standing orders" that prescribe this. It is paragraph 26-A(2) of the PF scheme that limits the employer's contribution.
Regards,
Varghese Mathew
[Phone Number Removed For Privacy Reasons]
From India, Thiruvananthapuram
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Provident Fund - Excluded Employee - Definition.pdf
Latest amendment in Provident fund scheme.doc