Hello All! It is optional for the employer to deposit the PF over Rs. 6500 basic salary, even if the employee is willing to continue with the PF deduction. I wanted to confirm, is it okay for the employer to stop contributing its share if he has been sharing for the last 1 year, and now he realizes that he doesn't want to continue with his share. Please let me know if this can be done, and if this is legal.
Thanks & Regards!
From India, Delhi
Acknowledge(0)
Amend(0)
Thanks & Regards!
From India, Delhi
Acknowledge(0)Amend(0)
Employee Provident Scheme 1952: Contribution Guidelines
As per the Employee Provident Scheme 1952, the basic contribution of PF is 12% on the basic salary. The contribution must be from both the employee and the employer. The employer can't stop PF processing.
The usual practice in the industry is that PF contributions from both the employee and employer will be included in the CTC only.
It is optional for the employer to deposit the PF over a Rs. 6500 basic salary, even if the employee is willing to continue with the PF deduction. I wanted to confirm, is it okay for the employer to stop contributing its share if they have been contributing for the last year and now realize they don't want to continue with their share. Please let me know if this can be done, and if this is legal.
Thanks & Regards!
From India, Bangalore
Acknowledge(0)Amend(0)
18As per the Employee Provident Scheme 1952, the basic contribution of PF is 12% on the basic salary. The contribution must be from both the employee and the employer. The employer can't stop PF processing.
The usual practice in the industry is that PF contributions from both the employee and employer will be included in the CTC only.
It is optional for the employer to deposit the PF over a Rs. 6500 basic salary, even if the employee is willing to continue with the PF deduction. I wanted to confirm, is it okay for the employer to stop contributing its share if they have been contributing for the last year and now realize they don't want to continue with their share. Please let me know if this can be done, and if this is legal.
Thanks & Regards!
From India, Bangalore
Acknowledge(0)Amend(0)
EPF is not like ESI. If a person has been receiving EPF benefits since last year and their salary increases above the limit, the employer still cannot stop contributing to it. In the case of ESI, if the employee's salary exceeds the limit, the employer is not required to contribute after the contribution period.
However, with EPF, once the deduction begins, the employer must continue contributing until the employee resigns. The employer only needs to contribute up to the ceiling of Rs. 6500, even if the salary is higher. For example, if the employee's EPF salary is Rs. 7500, the employer only needs to contribute Rs. 780, which is 12% of Rs. 6500.
I hope this is clear to you now.
From India, Kochi
Acknowledge(0)Amend(0)
However, with EPF, once the deduction begins, the employer must continue contributing until the employee resigns. The employer only needs to contribute up to the ceiling of Rs. 6500, even if the salary is higher. For example, if the employee's EPF salary is Rs. 7500, the employer only needs to contribute Rs. 780, which is 12% of Rs. 6500.
I hope this is clear to you now.
From India, Kochi
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Provident Fund - Excluded Employee - Definition.pdf
What is Employee Provident Fund.docx