Hi, can anyone please confirm whether PF is optional for an employee whose take-home pay is ₹30,000 per month? We are facing an issue where an employee is not willing to avail of the PF benefits. Our total number of employees is 23 members. Please suggest to me.
From India, Tirupati
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3From India, Tirupati
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Hi, As per PF rule if any Employe Basic is less than ceiling point-6500 rs then PF deduction is mandatory, if more than ceiling point then its optional.
From India, Mumbai
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From India, Mumbai
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PF Membership Options for Employees
It is not like that. If an employee with a salary above ₹6,500 per month is not already a PF member, they have the option to join or not join PF. However, if they were a member, they have no option; they must be in EPF.
Regards,
Varghese Mathew
[Phone Number Removed For Privacy Reasons]
From India, Thiruvananthapuram
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It is not like that. If an employee with a salary above ₹6,500 per month is not already a PF member, they have the option to join or not join PF. However, if they were a member, they have no option; they must be in EPF.
Regards,
Varghese Mathew
[Phone Number Removed For Privacy Reasons]
From India, Thiruvananthapuram
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Option for Employees to Opt-Out of PF Deduction
If employees don't want PF deduction, there is an option of Form 11 (Declaration by a person taking up employment in an establishment in which the Employees' Provident Fund & Family Pension Fund Scheme is enforced). By submitting this form, PF deductions will not be made, and the employer will also not need to contribute to that individual.
From India, Chennai
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If employees don't want PF deduction, there is an option of Form 11 (Declaration by a person taking up employment in an establishment in which the Employees' Provident Fund & Family Pension Fund Scheme is enforced). By submitting this form, PF deductions will not be made, and the employer will also not need to contribute to that individual.
From India, Chennai
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AADI & Kanimsw, Please read para 26 along with para 2(f) of Employees Provident Fund Scheme 1952 for answer to your doubt.This was discussed many times in this forum. Varghese Mathew 09961266966
From India, Thiruvananthapuram
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From India, Thiruvananthapuram
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Hi Mathew, I went through that. Actually, if an employee has not closed their PF account and has not withdrawn their PF, then they should remain a member. If they have closed the account and withdrawn the money, then they have the option to opt out of the PF through mutual understanding between the employee and the employer.
For Your Reference:
Employees Required to Join the Fund
The following employees are required to join the fund (Para 26 of EPF Scheme):
• (i) Every employee employed in or in connection with the work of the factory or other establishment to which the EPF Scheme applies, except an excluded employee drawing a salary exceeding Rs. 6,500.00 p.m. {Para 26(1)}.
• (ii) Every employee is required to join the fund from the date of joining the factory or establishment {Para 26(2)}.
• (iii) Every excluded employee, on ceasing to be an excluded employee, i.e., makes an application jointly with the employer.
From India, Mumbai
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For Your Reference:
Employees Required to Join the Fund
The following employees are required to join the fund (Para 26 of EPF Scheme):
• (i) Every employee employed in or in connection with the work of the factory or other establishment to which the EPF Scheme applies, except an excluded employee drawing a salary exceeding Rs. 6,500.00 p.m. {Para 26(1)}.
• (ii) Every employee is required to join the fund from the date of joining the factory or establishment {Para 26(2)}.
• (iii) Every excluded employee, on ceasing to be an excluded employee, i.e., makes an application jointly with the employer.
From India, Mumbai
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Definition of Excluded Employee
Read the definition of an excluded employee. Only employees who withdrew PF upon retirement after 55 years or those migrating from India to settle abroad can be claimed as 'excluded' employees. This does not apply to those who have resigned and withdrawn PF.
Regards,
Varghese Mathew
From India, Thiruvananthapuram
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Read the definition of an excluded employee. Only employees who withdrew PF upon retirement after 55 years or those migrating from India to settle abroad can be claimed as 'excluded' employees. This does not apply to those who have resigned and withdrawn PF.
Regards,
Varghese Mathew
From India, Thiruvananthapuram
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As per PF rules, if an employee's basic salary is below the ceiling point of ₹6,500, PF deduction is mandatory. If the basic salary is above the ceiling point, then it is optional. However, if an employee has had PF deductions in a previous company, they are eligible or mandatory for PF deduction in their current and future organizations. In the case where an employee is starting their first job with a basic salary higher than ₹6,500, it is optional for them to choose whether they want PF deductions or not.
From India, Udaipur
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From India, Udaipur
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PF Is optional for the freshers who have never had a PF account is past, In case you had a PF account it becomes mandatory for you to go ahead with PF Investment.
From India, Gurgaon
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From India, Gurgaon
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Jay. Do you think that for a fresher with basic of less than Rs6500/- pm ,PF is optional.No it is not optional. Varghese Mathew
From India, Thiruvananthapuram
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From India, Thiruvananthapuram
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yes It Is, However its not on docs but many reputed companies are offerings this. You are correct no doubt.
From India, Gurgaon
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From India, Gurgaon
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As per the EPF Act, every employee should be a member of PF and eligible for EPF benefits, contributing to the EPF fund. An employee who does not want EPF benefits should have opted out at the beginning of their career and informed the employer and EPF office using a prescribed form, i.e., Form 11. By that time, their basic wage must be above ₹6,500.
Once an employee becomes a member of EPF, they should remain a member until superannuation, regardless of job switches or salary enhancements.
It is beneficial for the member to have savings with an impressive interest rate and without any tax imposition on a certain amount. Try to convince employees by explaining all the EPF benefits.
Regards,
Ravichandra
From India, Hyderabad
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Once an employee becomes a member of EPF, they should remain a member until superannuation, regardless of job switches or salary enhancements.
It is beneficial for the member to have savings with an impressive interest rate and without any tax imposition on a certain amount. Try to convince employees by explaining all the EPF benefits.
Regards,
Ravichandra
From India, Hyderabad
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Thank you for your suggestions. However, I am currently facing a new issue, and I would appreciate your assistance. Our organization is one year old, and we have not yet registered for PF and ESI. Recently, we have reached 20 employees. We are now in the process of registering for PF and ESI. However, most employees have a basic salary exceeding ₹6,500 and are not interested in availing PF and ESI benefits. If we exempt these employees, we will have around 10 remaining members.
In this situation, I am unsure whether I need to proceed with PF registration. Is it mandatory?
From India, Tirupati
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In this situation, I am unsure whether I need to proceed with PF registration. Is it mandatory?
From India, Tirupati
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I see that the discussion has gone all over the place. The rules for whether PF is compulsory can be summarized as below:
1. For all new employees, if their salary is less than ₹6,500 per month, then PF is compulsory.
2. For any new employee with a salary above ₹6,500 per month, who does not have an existing PF account, they can opt out of PF by filling Form 11.
3. An existing employee cannot opt out of PF once they have a PF account.
You need to follow the rule based on what the starting salary of the person was. Salary is defined under the PF Act as Basic + DA.
From India, Mumbai
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1. For all new employees, if their salary is less than ₹6,500 per month, then PF is compulsory.
2. For any new employee with a salary above ₹6,500 per month, who does not have an existing PF account, they can opt out of PF by filling Form 11.
3. An existing employee cannot opt out of PF once they have a PF account.
You need to follow the rule based on what the starting salary of the person was. Salary is defined under the PF Act as Basic + DA.
From India, Mumbai
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Mandatory PF Membership for Freshers
For freshers who are taking up employment for the first time, it is compulsory to become PF members. The ceiling of PF is likely to be enhanced, as shared by the Minister of State for Labour in the previous Ministry.
Options for Existing PF Members
Those who were already members of PF and are currently employed with a higher salary have the option to become PF members by contributing to the PF at the stipulated percentage of the ceiling limit.
Voluntary Provident Fund (VPF) Contributions
Those who wish to invest more in PF are also free to contribute to PF as VPF (Voluntary Provident Fund) contributions.
Thanks,
R K Nair
From India, Aizawl
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For freshers who are taking up employment for the first time, it is compulsory to become PF members. The ceiling of PF is likely to be enhanced, as shared by the Minister of State for Labour in the previous Ministry.
Options for Existing PF Members
Those who were already members of PF and are currently employed with a higher salary have the option to become PF members by contributing to the PF at the stipulated percentage of the ceiling limit.
Voluntary Provident Fund (VPF) Contributions
Those who wish to invest more in PF are also free to contribute to PF as VPF (Voluntary Provident Fund) contributions.
Thanks,
R K Nair
From India, Aizawl
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Hi, thanks for your suggestions. But here I am facing a new issue; kindly help me out. Our organization is one year old. Till now, we haven't made any registration in PF & ESI. Recently, we have reached 20 employees. We are in the process of PF & ESI registration. However, most of the people have a basic salary exceeding ₹6,500, and those employees are not interested in taking PF & ESI benefits. If we exempt those employees, the remaining workforce will be around 10 members. In this situation, do I have to make PF registration? Is it mandatory?
PF Registration Requirement
You have to do PF registration. You can exempt employees whose Basic + DA + cash value of food provided is greater than ₹6,500. As per the PF Act, you have to register for EPF if you have 20 or more employees. It is better to start the registration before you reach 20 employees' strength on your muster roll. It is not the case that if you have contributing members of 20 or less, the total figure should be 20 (Exempted + not exempted) for PF registration to be mandatory.
From India, Mumbai
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PF Registration Requirement
You have to do PF registration. You can exempt employees whose Basic + DA + cash value of food provided is greater than ₹6,500. As per the PF Act, you have to register for EPF if you have 20 or more employees. It is better to start the registration before you reach 20 employees' strength on your muster roll. It is not the case that if you have contributing members of 20 or less, the total figure should be 20 (Exempted + not exempted) for PF registration to be mandatory.
From India, Mumbai
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In that is the case where will the amount goes from employer side as the employer supposed to contribute the amount with the employee contribution? Could you please help?
From India, Bangalore
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From India, Bangalore
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As per my knowledge, PF is compulsory for all employees in an organization if their strength is more than 20. The wage limit is ₹6500 and above, which is an option for management. We cannot exclude PF. If you want to seek exclusion, then you have to register your organization as a PF exempted organization. To do so, your organization should have its own PF scheme that takes care of all the benefits available in the PF scheme. Only then can an employee seek exclusion using Form-11.
Another scenario where an employee can be excluded from PF is if the employee is already benefiting from the PF scheme.
Please correct me if I'm wrong in any of the above statements.
Kind Regards,
Shreyas
From India, Bengaluru
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Another scenario where an employee can be excluded from PF is if the employee is already benefiting from the PF scheme.
Please correct me if I'm wrong in any of the above statements.
Kind Regards,
Shreyas
From India, Bengaluru
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It is not necessary for him to contribute his salary to PF because his basic salary ceiling is above the PF basic limit. Now, the government has increased the PF ceiling from ₹6,500 to ₹15,000. His employer has requested the PF department that he contributes his basic salary, as written on the company letterhead. This would make it possible for it to be treated as VPF.
From India, Kolkata
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From India, Kolkata
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I agree with this reply. This is right answer. PF ceiling is 6500 and above it depends on the employee to contribute or not.
From India, Delhi
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From India, Delhi
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If an employee's Basic + DA is more than ₹6,500 per month, the employer wishes to know whether to deduct the PF or not. Another option is to fill out Form No. 11 for employees who don't want to have PF deducted, but all the previous PF must be withdrawn.
Hope this will help you.
Regards.
From India, Vijayawada
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Hope this will help you.
Regards.
From India, Vijayawada
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Many of the comments here are misleading, so I am forced to repeat what I have said before.
Exemption from Provident Fund (PF)
Exemption from PF is only for an employee whose starting salary in the organization is above ₹6500 and who did not have any existing PF account when they joined the company. If either of these conditions is not fulfilled, you need to deduct PF as per the law.
PF Withdrawal and Transfer
You do not have the option of deciding whether or not you will withdraw your PF. You are required by law to transfer it to your new company unless the new company is not covered under PF.
From India, Mumbai
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Exemption from Provident Fund (PF)
Exemption from PF is only for an employee whose starting salary in the organization is above ₹6500 and who did not have any existing PF account when they joined the company. If either of these conditions is not fulfilled, you need to deduct PF as per the law.
PF Withdrawal and Transfer
You do not have the option of deciding whether or not you will withdraw your PF. You are required by law to transfer it to your new company unless the new company is not covered under PF.
From India, Mumbai
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