Hi Friends, I would like to know whether the new rule for PF is applied, i.e., 12.5% of the gross monthly salary. Earlier, it used to be 12.5% of the basic. Also, is there any minimum limit of employees required to start a PF account for the employees in the company?
From India, Bangalore
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1From India, Bangalore
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Hi Ajit PF is 12% on the Basic & not 12.5%. As of now there is no amendment 12% on the gross pay. But PF is calculated on Basic, DA, and other allowances too except HRA
From India, Bangalore
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From India, Bangalore
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Thank you for the information. It was a bit confusing as there was an update in December 2012 regarding new PF rules, stating that 12% of the gross. Anyway, thank you for the clarification. Also, could anybody help me to know what is the minimum number of employees required to start a PF account for the employees in the company?
From India, Bangalore
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From India, Bangalore
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Please go through the thread at https://www.citehr.com/443481-pf-cir...-abeyance.html, which will be useful for you. Furthermore, the discussions in the thread at https://www.citehr.com/442860-pay-mo...-salary-3.html will give you a clear picture.
Thank you.
From India, Kumbakonam
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Thank you.
From India, Kumbakonam
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PF Contribution Rate Clarification
The PF contribution rate for employees and employers is 12% only. Except for HRA, basic/DA/other allowances should be considered for 12%.
If the aforementioned elements exceed Rs. 6500, meaning if someone is receiving basic/DA/other allowances more than Rs. 6500, we can cap the PF wage at Rs. 6500 - (6500 * 12% = Rs. 780), resulting in a Rs. 780 PF deduction. Once the basic, DA, and other allowances are less than Rs. 6500, we should not cap the amount, and the contribution rate should remain at 12%.
There is no limit to start PF. From the first day of joining, PF contributions should be taken into account.
Regards,
Jerold
From India, Chennai
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The PF contribution rate for employees and employers is 12% only. Except for HRA, basic/DA/other allowances should be considered for 12%.
If the aforementioned elements exceed Rs. 6500, meaning if someone is receiving basic/DA/other allowances more than Rs. 6500, we can cap the PF wage at Rs. 6500 - (6500 * 12% = Rs. 780), resulting in a Rs. 780 PF deduction. Once the basic, DA, and other allowances are less than Rs. 6500, we should not cap the amount, and the contribution rate should remain at 12%.
There is no limit to start PF. From the first day of joining, PF contributions should be taken into account.
Regards,
Jerold
From India, Chennai
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Hi Jerold, Need small clarification. Can a employee opt out of PF, giving in writing to HR once the Basic+HRA+ Other Allowance put together exceeds 6500/- SP
From India, Madras
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From India, Madras
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Once the employee is covered under EPF, even if there is any hike in wages that exceeds ₹6,500, contributions are mandatory. In this case, if both parties are willing, contributions shall be 12% on basic, HRA, and other allowances; otherwise, it shall be restricted to ₹6,500.
From India, Bangalore
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EPF Guidelines Update
Union Labour and Employment Minister Mallikarjun Kharge announced on December 13, 2012, that the Circular dated November 30, 2012, regarding Guidelines for Quasi-judicial proceedings under section 7A of the EPF & MP Act, 1952, issued by the EPFO on the inclusion of certain allowances for calculating Provident Fund contributions, is to be kept in abeyance. Therefore, the status quo will continue.
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From India, Mumbai
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Union Labour and Employment Minister Mallikarjun Kharge announced on December 13, 2012, that the Circular dated November 30, 2012, regarding Guidelines for Quasi-judicial proceedings under section 7A of the EPF & MP Act, 1952, issued by the EPFO on the inclusion of certain allowances for calculating Provident Fund contributions, is to be kept in abeyance. Therefore, the status quo will continue.
For SSHRIEE CONSULTANCY
From India, Mumbai
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Provident Fund - Excluded Employee - Definition.pdf